If you co-signed on your sons, daughters, wife’s account, you’re accountable for his/her credit card liability. After regulations passed in the CARD Act of 2009, it’s more problematic for young adults to qualify for credit cards, so more and more parents are co-signing on accounts and substituting as underwriters for their children. If you’ve already taken that step, you should hopefully have realized that your family’s purchases will disturb your credit, irrespective of your involvement.
In this situation, it may be more practical to pay off the debt if you can, cancel their account, and grind together to devise a payment plan to correct the situation and make sure it never happens again. If you haven’t co-signed yet, sit down for a serious discussion with your family keeping in mind your financial obligation.
Negative credit now will impact financial future later, but so will bad conducts. If you don’t learn from your blunders now, there could be larger and more harmful mistakes ahead. Will bailing out of financial chaos with creditors make you understand the seriousness of your mistakes? Or will you just end up nurturing sense of dependency on someone else? You won’t always have a wallet in hand to save yourself, so if you can manage to take the credit hit, perhaps it’s best to learn a lesson this time to avoid future mistakes.
Loaning money to someone you know is always, always disorganized. While your family should intelligently know that your love is absolute (which is why your help comes so willingly), for them, it’s expressively very problematic to face you when they owe you money. Many relationships have been ruined by arrears of personal loans, both from abandoned payments and feelings of shame. Be sure that if you select to help your family, you pledge to upholding an open dialogue and doing your best to keep business and family separate.