{"id":15898,"date":"2010-07-16T20:00:17","date_gmt":"2010-07-17T00:00:17","guid":{"rendered":"\/\/www.askmrcreditcard.com\/news\/?p=15898"},"modified":"2010-07-16T20:00:17","modified_gmt":"2010-07-17T00:00:17","slug":"the-parent-trap","status":"publish","type":"post","link":"https:\/\/www.askmrcreditcard.com\/news\/the-parent-trap\/","title":{"rendered":"The Parent Trap"},"content":{"rendered":"

It seems like the way things work in the world is when the parents are responsible, and it is their kids who are rebellious and prone to poor decision making.\u00a0\u00a0\u00a0 In that world, it would be the adult children who would beg their parents to co-sign a loan for them on a new car or that loft downtown to impress their friends.<\/p>\n

One unusual aspect of today’s current financial crisis is that it is severely affecting the credit of all Americans, even older ones. \u00a0 One of the ramifications of this is that it is often parents who are asking their adult children to co-sign a loan, according to the Denver Post .<\/a><\/p>\n

Like conventional loans, credit card holders also face the challenge of having family members ask them for a card on their account, the equivalent of a co-signed loan.\u00a0\u00a0 Like the loans discussed in the article, joint credit card account holders are each responsible for the balance.<\/p>\n

Should You Do It?<\/strong><\/p>\n

It is very rare that this arrangement makes sense, outside of a married couple or a parent and a minor child.\u00a0\u00a0 When you give someone a credit card on your account or a joint account, you are going to be responsible for paying all charges.\u00a0\u00a0\u00a0 For a married couple that manages their finances jointly, this make perfect sense.\u00a0\u00a0 As a teenager, I always had a credit card on my parent’s account.\u00a0\u00a0 I was only to use it in emergencies or for purchases that they approved of in advance.\u00a0\u00a0 It would be very difficult for me to think of another\u00a0 situation where I would have a card in another person’s name.<\/p>\n

If I wished to help someone out financially, I would much rather extend them a personal loan then to give them an authorized credit card or worse, a joint account.\u00a0\u00a0 I have always organized my finances around the principle that I will pay off each balance in full and on time, every month.\u00a0\u00a0 To do so, I keep track of my spending so that I know that I will be able to pay it back at the end of the month.\u00a0\u00a0 Giving a credit card on my account to another person means giving up the direct control of my spending.<\/p>\n

The article points out how it is difficult to say no to a parent in the situation where they are asking for you to co-sign a loan.\u00a0\u00a0 I suspect it would be no less difficult to turn down a parent’s request for a credit card.<\/p>\n

On Loans To Friends And Family<\/strong><\/p>\n

This is a hugely tricky subject.\u00a0\u00a0 A good friend is worth more than money, and the same is true of a strong relationship with a family member.\u00a0\u00a0 I once read that when a good friend or a family member is in financial trouble, it is better to offer a gift than a loan.\u00a0\u00a0 A gift, of course, does not carry the requirement that it is paid back.\u00a0\u00a0 If you are unable to gift the money necessary, you should not be loaning it.\u00a0\u00a0\u00a0 By gifting it, you ensure that you will retain the same relationship whether or not the person is ever able to return the money.<\/p>\n

I know this is a blog about credit cards and personal finance.\u00a0 I am not a psychologist, a family counselor, or even a relationship advice columnist.\u00a0 Nevertheless, almost everyone knows someone who is in financial trouble these days and you should consider the long term effects on your credit and your relationship before entangling your credit with your friends or family.<\/p>\n","protected":false},"excerpt":{"rendered":"

It seems like the way things work in the world is when the parents are responsible, and it is their kids who are rebellious and prone to poor decision making.\u00a0\u00a0\u00a0 In that world, it would be the adult children who would beg their parents to co-sign a loan for them on a new car or […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[],"yoast_head":"\nThe Parent Trap<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.askmrcreditcard.com\/news\/the-parent-trap\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Parent Trap\" \/>\n<meta property=\"og:description\" content=\"It seems like the way things work in the world is when the parents are responsible, and it is their kids who are rebellious and prone to poor decision making.\u00a0\u00a0\u00a0 In that world, it would be the adult children who would beg their parents to co-sign a loan for them on a new car or […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.askmrcreditcard.com\/news\/the-parent-trap\/\" \/>\n<meta property=\"og:site_name\" content=\"Ask Mr Credit Card Blog\" \/>\n<meta property=\"article:published_time\" content=\"2010-07-17T00:00:17+00:00\" \/>\n<meta name=\"author\" content=\"Jason Steele\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jason Steele\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" 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