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Credit Cards

Q&A: Credit cards and co-signers

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Dear Liz: My son is in his mid-20s. He has a credit card that we co-signed and that has a credit limit he would likely not qualify for on his own. He would like to remove us as co-signers as he starts to take more personal control of his finances. Would it make more sense to apply for a new card using only his income information, and then slowly stop using the old card? Or is it better just to take the hit on his credit rating now and request our removal from the old card?

Answer: It’s not clear whether you’ll be able to bow out of this arrangement without closing the card. Most major credit card issuers don’t allow co-signers. More typically, parents would add their children as authorized users. While the parents can remove their children from the account, the opposite isn’t true.

If this is a co-signed card, the issuer may have an option for removing you. Your son will need to call and ask.

In general, though, it would be better for his credit to apply for a card on his own and leave this account open.

This week’s money news

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This week’s top story: As rates fall, should you refinance your student loans? In other news: Weekly mortgage rates rise for 6th straight week, where the candidates stand on personal finance issues, and how credit cards can help you navigate major life changes.

As Rates Fall, Should You Refinance Your Student Loans?
Consider refinancing private student loans if you can get a rate at least half a percentage point lower. If you have federal loans, think twice.

Weekly Mortgage Rates Rise for 6th Straight Week
You could illustrate the dictionary definition of “bummer” with a graph of recent mortgage rates.

Election 2024: Where the Candidates Stand on Personal Finance Issues
Here’s a rundown of how Harris and Trump promise to improve your finances.

How Credit Cards Can Help You Navigate Major Life Changes
Credit card perks can come in handy when you’re facing large expenses, whether you’ve planned for them or they pop up unexpectedly.

This week’s money news

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This week’s top story: Student loan ‘financial hardship’ forgiveness. In other news: What $20 gets you at gas stations in each state, holiday airfare is down, and when it pays to know your credit card’s interest rate.

Student Loan ‘Financial Hardship’ Forgiveness: New Details Revealed
If you face persistent medical bills, family caregiving costs or other financial hardship, the Education Department wants to cancel your student loan debt. But don’t count on it yet.

What $20 Gets You at Gas Stations in Each State
Gas prices are falling toward four-year lows — but vary widely across the country.

Holiday Airfare Is Down. Why Isn’t Travel Spending?
Higher hotel prices and a desire for comfort have travelers spending more than ever this holiday season.

When It Pays to Know Your Credit Card’s Interest Rate
If you’re aware of what your current APR is, you can more easily identify ways to lower it and save money.

Q&A: Beware foreign transaction fees when using credit cards abroad

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Dear Liz: I have a question regarding the use of credit cards for foreign transactions. Are the card companies required to use a certain exchange rate? I’ve used two different cards, and the one that charges a fee used a better exchange rate. The total cost to me, including the fee, was less than the other card. How can I find out what exchange rates are used?

Answer: You can always ask. Credit card companies may use a number of different exchange rates. Often they use the ones set by their payment networks, such as Visa or Mastercard, or by their issuing banks.

Keep in mind that exchange rates are constantly changing. Unless you used the two cards within a relatively short period, it would be hard to draw conclusions about which got the better rate. Also, you will get a much worse deal if you ever agree to a “dynamic currency conversion” that charges the transaction in U.S. dollars rather than the prevailing currency. When offered the choice, opt for the charge to be in the local currency.

Most travelers find they’re better off using a credit card that doesn’t charge foreign transaction fees. These fees are typically just another profit center for the issuing banks.

This week’s money news

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This week’s top story: What Trump and Harris have in store for your taxes. In other news: Credit card-bonus-friendly season is here, October mortgage outlook, and drawbacks to consider before getting metal credit card.

What Trump and Harris Have in Store for Your Taxes
Most, if not all, of the candidates’ tax proposals would need approval by Congress.

If You’re Considering a Credit Card, Bonus-Friendly Season Is Here
The October-through-December holiday window is an especially ideal time for snagging a rich welcome offer.

October Mortgage Outlook: No Rate Jumps or Scares
Mortgage rates may idle above 6% until markets and the Fed catch up.

Is Your Metal Credit Card Losing Its Edge?
Once a rare luxury enhancement, metal credit cards are more attainable for the average consumer today. And there are drawbacks to consider before getting one.

Q&A: After her husband died, a widow’s credit limit plummeted

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Dear Liz: You’ve mentioned how important it is for spouses to each have credit cards on which they are the primary account holder. My husband died last year. We had a credit card with statements that showed the charges we each had made on our separately numbered credit cards. I found the account was in his name only. I had to get a new credit card in my own name, and the credit limit dropped from $75,000 to $7,000. Hope this warns others.

Answer: It bears repeating that most credit cards these days are not joint accounts. If two of you are using a card, one is probably the primary account holder and the other the authorized user.

After a primary account holder dies, credit card companies are often willing to work with surviving spouses who were authorized users to establish new accounts. But as you experienced, the credit limits for these new accounts may be much lower than those of the original.