Table of Contents
- What Is an Authorized User?
- Responsibilities of an Authorized User
- Authorized User vs. Joint Credit Card
- Benefits of Having an Authorized User on Your Credit Card
- Adding or Becoming an Authorized User on a Credit Card
- Removing an Authorized User on a Credit Card
- How to Monitor Your Credit as an Authorized User
- FAQ
Understanding what it means to be an authorized user on a credit is important for both the account holder and the person being added. This strategic move allows an individual to build a positive credit history by piggybacking on a well-managed account.
However, risks exist for both parties. The primary cardholder is legally responsible for all debt, and negative habits — like high utilization or missed payments — can damage both people’s credit profiles. Success requires clear communication and mutual trust.
Here’s a look at what you need to know, including the process of adding a user and how to manage the account effectively to ensure everyone benefits.
Key Points
• An authorized user can use the primary account holder’s credit card but is not legally responsible for the debt incurred.
• Adding an authorized user is often used as a strategy to help a family member, like a child or spouse, build a positive credit history.
• The primary cardholder is legally liable for all charges, and irresponsible use by either party can negatively affect both credit scores.
• Unlike a joint cardholder, an authorized user does not need to apply, go through a credit check, or meet the credit card’s requirements.
• Primary cardholders can typically add or remove an authorized user via the issuer’s website, mobile app, or by calling customer service.
What Is an Authorized User?
An authorized user is someone that the primary cardholder — the individual who owns the credit card account and is responsible for charges to the card — has authorized to use their card. Some points to know:
• Unlike a primary cardholder, an authorized user on a credit card is not subject to credit checks and other credit card issuer requirements in order to use the card. However, the individual — who is often a spouse, child, or other family member — must meet the card issuer’s age requirements (often 13 – 16 years old).
• Adding an authorized user is typically free. However, some cards with high annual fees may charge an additional fee for each authorized added to the account. The number of authorized users allowed on each card varies by issuer.
• An authorized card user will typically get a card with their name on it that is linked to the primary cardholder’s account.
• Authorized users may be able to view their transaction history, make payments on the account, dispute charges, and request refund checks.
• An authorized user cannot change the contact information or account PIN, request a change to the credit limit or card’s annual percentage rate (APR), or add more authorized users.
Responsibilities of an Authorized User
While not legally obligated, authorized users are generally expected to follow basic guidelines of responsible credit card use. To maintain trust and protect both parties’ credit health, it’s a good idea to establish some clear expectations:
• Pre-defined spending limits: In some cases, an issuer will allow the primary cardholder to set spending limits on the secondary card. Even if that isn’t an option, it’s a good idea for the account owner to set a clear monthly budget for the authorized user.
• Repayment terms: Consider establishing a formal agreement on how purchases will be handled. Will the authorized user pay the primary cardholder directly, or will they make payments toward the account balance themselves?
• Strict security protocols: Authorized users are generally expected to treat the card as if it were their own — keeping the physical card secure and never sharing account numbers or CVV codes with third parties.
• Credit awareness: Ideally, both parties should understand that the account’s history — including credit utilization and payment punctuality — will likely appear on both credit reports. Responsible use builds credit, but a missed payment by the primary holder can negatively impact the authorized user.
Authorized User vs. Joint Credit Card
It’s easy to confuse authorized users with joint credit card holders. But there are some key differences between the two.
• With a joint account, both cardholders are legally responsible for making payments. With an authorized user, only the primary cardholder is responsible for the debt.
• Joint cardholders also must meet credit card issuer requirements, such as a minimum credit score, and go through the application process in order to get the card. This is not true for authorized users of a credit card.
• Joint accounts are commonly used by partners who share their finances. Not all credit card issuers allow joint accounts though, and they are becoming less common. Authorized users, however, are widely accepted.
Benefits of Having an Authorized User on Your Credit Card
There are compelling reasons why you may want to either become an authorized user or add an authorized user to your credit card account. Here are the benefits for both parties involved.
Benefits for the Authorized User
Advantages for authorized users include:
• Opportunity to build credit: A positive history (such as on-time payments and low credit utilization) on the card is typically added to the user’s credit report, which can strengthen their credit.
• No credit check required: The user can be added without their own creditworthiness being checked, which is useful if they have a poor or nonexistent credit file.
• Access to credit and perks: Authorized users get their own card for purchases and may access the primary cardholder’s perks, such as passes to airport lounges, hotel benefits, or travel insurance.
• No legal debt obligation: While they can use the card, the authorized user is not legally responsible for paying the balance; only the primary cardholder is.
Benefits for the Primary Cardholder
Advantages for the account owner include:
• Increased rewards earnings: Additional spending by the authorized user can the primary cardholder reach spending requirements for sign-up bonuses and accumulate more points, cash back, or miles.
• Convenience and organization: Household, family, or business expenses can be streamlined, making it easier to track all purchases in one statement.
• Emergency access: It provides a trusted individual (such as a child or spouse) with financial access in unexpected situations.
• Building credit for others: The account holder can help a spouse, child, or partner establish or positively impact their credit using your positive payment history.
Adding or Becoming an Authorized User on a Credit Card
Only a primary cardholder can add an authorized user to their card. To do so, you’ll generally go through the following steps:
1. Notify your credit card issuer. Let your card issuer know that you would like to add an authorized user to your card. In most cases, you can do this over the phone or by filling out a form online.
2. Have the necessary information on hand. You may need the name, Social Security number, date of birth, and contact information for the authorized user you intend to add to the card.
3. Check what will get reported to the credit bureaus. It’s important to find out if the card company will report credit information to the credit reporting bureaus for the authorized. This can help the authorized user establish a credit history.
4. Determine if you’ll give the authorized user full access to the card. Card card issuers usually issue a second physical card with the authorized user’s name on it once they are added to the account. It is up to the primary cardholder to decide whether to give the physical card to the authorized user. You may choose to hold onto the card and only let them use it under your supervision.
Removing an Authorized User on a Credit Card
A primary cardholder can remove an authorized user from their card at any time. Simply call or go online to request a change.
Keep in mind that the authorized user may see a change in their credit score if they are removed. This is because credit score calculations take into account both the age of credit accounts and the number of open accounts, both of which may decrease when an authorized user drops off the card of someone with a more established credit history.
How to Monitor Your Credit as an Authorized User
If you’re an authorized user eager to build credit, it can be helpful to monitor your credit reports to make sure your activity is being accurately reported. You can get free weekly copies of your credit reports from the three credit bureaus — Experian®, TransUnion®, and Equifax® — through AnnualCreditReport.com.
It’s also important for both the authorized user and the primary cardholder to be cautious and mindful about how their activity can affect one another’s credit. Irresponsible credit usage by either party can have implications for the credit of both the primary cardholder and the authorized user.
Recommended: Does Applying For a Credit Card Hurt Your Credit Score?
The Takeaway
Authorized users are typically added to an account held by a family member or other responsible adult. They have access to the card’s buying potential, but it’s the primary cardholder who is responsible for the debt. It’s important for both parties to keep in mind that while their credit usage has the potential to build their credit, it can also cause damage if payments are late or credit is maxed out.
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FAQ
How many authorized users can I add to a single card account?
Each credit card issuer has different rules concerning the number of authorized users permitted. You’ll find this information in the terms and conditions for your credit card. Some credit card issuers charge a fee for each authorized user added on your account.
Is credit activity reported to the credit bureau for an authorized user?
Typically, credit card issuers report activity to the credit bureaus for an authorized user as well as the primary card holder. Building credit in this way can be a benefit of becoming an authorized user. Check with your credit card issuer to find out if credit activity will be reported for the authorized user.
Does adding someone as an authorized user help their credit?
Building your credit record can be a big benefit of becoming an authorized user, especially if the primary cardholder has a good credit rating and continues to make on-time payments. In order to build your credit record, however, the credit card issuer needs to report your activity to the credit bureaus.
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