Credit card co-signatories 'need to be careful'

Caution is required on the behalf of those becoming a joint holder on a credit card.

Such is the assertion of James Lonie, partner at Sydney-based law firm Henry Davis York, who writes in an article for the Australian that consumers should be particularly careful when the person they are signing with is a close friend or family member.

And should they find the co-signatory runs up a significant amount of debt, Mr Lonie claims Aussie credit consumers could find themselves facing action from a bank.

"You will be jointly responsible for the debt. This means the bank or other creditor can recover the debt from the bankrupt, both of you or just you," he states, strongly advising such credit card holders against burying their head in the sand with regards to such issues.

Consequently, people are urged to check the paperwork of their product to make sure they know exactly what is required of them.

And if they do not keep up with repayments, he reminds consumers that their credit rating may be negatively affected.

Meanwhile, Eddie Grober, executive vice-president of MasterCard Australia, recently claimed that Aussies' credit card expenditure habits are changing.