The Northwest Voice

All > Columnists > Consumer
Dollars & Sense: Is Co-signing a Good Thing to Do?
Topics:
Anonymous user Tue Nov 30, 1999 00:00:00 PST
Viewed 432 times
0 responses 0 comments Hello Northwest Readers!

Once again, thank you for sending in your e-mails and questions that most concern you.  In this column, I am going to talk about a subject that has affected every one of us in one way or another and concerns me deeply.

It’s co-signing.

We, as consumers, follow trends and many times, bad advice.  And, in many cases, it is difficult to change because we have done it wrong for so long that it has become habit. I’m referring to co-signing. 

We have been taught the only way for us to help a loved one, a relative or a friend is to co-sign for them.

As many of you have found out, when you co-sign for that person you thought would not or could not do you wrong, it has turned out to be one of the most devastating things that has ever happened. Then,  you are left holding an empty bag.

What we have to understand is that hundreds of thousands of years ago, God’s word talked about co-signing for our brethren. He tells us not to co-sign unless we are willing to suffer the consequences that come along with it.

This practice takes place hundreds and hundreds of times every day. People who do this put their credit at risk and in many cases, it can destroy families, relationships and marriages.

How do we stop this madness?

We need to understand that our credit system is designed on what appears to be correct and accurate.

As parents, we all would like to help our children get a good start in life and in many cases, we would do almost anything to help them out, but co-signing is not the best start.

First, start teaching them the value of credit around the age of 15.

Why 15? That’s because most likely on your child’s 17th birthday, you should get three credit cards, each with limits up to $1,000 in your name.

You can use these cards to purchase their school clothes, charging no more than $250 on each or the total amount you would have paid for in cash on these cards. Do not use these credit cards any longer once you have done this.

Now start making the minimum monthly payments or you can have your son or daughter make the minimum monthly payments to learn this new responsibility.
Then, add your son or daughter as a card user at 18.  After that, have your son or daughter apply for three new credit cards just in their name since now they can legally sign a contract.

Once they have achieved this goal, close out the original three credit cards you opened because your name is connected to those cards.

If your child wants to purchase a car or get an apartment, he or she would be able to do this without you having to co-sign. They now can stand on their own two feet.

You can do the same thing for anyone else. You may add them on as a card user once they have first cleared up any credit issues from their past. Otherwise, it won’t work for them. It will be like adding oil and water together (they don’t mix well).
I am also working on a new credit-building program with some of our local banks. Will keep you posted.

Remember, you can too have good credit.

— Tony Grimes is a local, independent debt consultant.  If you have questions about credit or other financial issues, please e-mail them to:Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.

Send to a Friend

Report a Violation