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Credit Cards

Must I Pay My Son's Credit-Card Debt?

Co-sign with caution. If you're on the application, you're accountable.

Q. I signed for an MBNA credit card with a $500 limit for my college-bound son. After he graduated, I paid the balance and forgot about the card. Three years later, I was shocked to get a call asking when I was going to pay an $8,000 balance. Can MBNA change the terms of the contract without contacting me? How do I remove this balance from my credit report?

As a rule of thumb, if you signed the application, you are accountable, says Steven Katz, director of consumer education for TransUnion's TrueCredit.com. As a co-applicant, you told the lender that you would accept full responsibility for the debt if your son didn't pay.

MBNA did not need to send you a new contract to raise the credit limit. Most agreements allow the issuer to increase the credit limit. That can work to your benefit because using a smaller percentage of your available credit raises your credit score.

Go online to AnnualCreditReport.com (or call 877-322-8228) for a free copy of your credit report, which will show ownership of the account. If it is jointly held, contact Bank of America, which now issues MBNA cards, and ask the bank to switch the account to your son's name only. If you offer to pay off the entire debt immediately, the bank may agree to make the change, says Emily Davidson, of Credit.com. If it does, ask the credit bureaus to remove the account from your file. If the bank says no, the negative data will remain on your credit report for seven years.

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