Authorized Users for Credit Cards
Being an authorized user allows you to use someone else’s account while building your credit.
What Is an Authorized User?
A credit card authorized user is an additional person permitted to use a principal cardholder’s account. The user receives a card with their name on and access to the account’s funds. They can use the card to make purchases, but the principal cardholder is responsible for the payments and controls the account.
Being an authorized user can help a person improve their credit, which can be beneficial for individuals with no or limited credit history.
Understanding Authorized Users
There are various reasons why a cardholder would choose to add an authorized user to their account. For instance, they may want to keep a credit account active and build their credit score. Some may do it to help another person build credit. Others may decide to have authorized users to improve their own credit scores as well.
The account owner can request to add anyone as an authorized user. However, they may have to meet a minimum age requirement set by the credit card issuer. Typically, primary cardholders add a spouse, partner, child or close friend as an authorized user. Some companies may also opt to add employees as authorized users on a business card.
Being a credit card authorized user can be beneficial. It provides you with a card in your name to use for purchases. You can also use it to establish your credit history since your credit report will reflect the credit card account. However, the legal responsibility for repayments is on the main account holder. That’s why both the principal owner and the authorized user should ensure responsible credit utilization.
Common Requirements for Authorized Users
Generally, adding a credit card authorized user is easy. It can be done online, by phone or by visiting a branch. The issuer may ask the principal account holder to answer security questions to prove their identity if they make the request online or by phone.
Typically, the account owner will need to provide the following information about the person they want to add as an authorized user:
Date of birth
Social Security Number
Address (where the card will be sent)
U.S. citizenship status (depends on card issuer)
Relationship to the principal (depends on card issuer)
Depending on the credit card issuer, there may be a minimum age requirement for authorized users. Some issuers may also charge an additional annual fee per authorized user added.
Limitations for Authorized Users
Authorized users are given credit, a card in their name they can use for various purchases. Charges are deducted from the primary cardholder’s account. There are limitations on what they can do to the credit line, including:
Raise the credit limit
Add more authorized users
Close the account
Change account information, such as mailing address
Some card issuers may have additional rules regarding authorized users. It’s best to clarify this information with them when discussing adding a user to your account.
How to Apply for an Authorized User
Ultimately, the decision to have an authorized user falls on the account owner. That’s because they are legally responsible for repayments and debts accumulated through the credit account. That said, the principal owner can have an agreement with the authorized user regarding payment of purchases made through the credit card.
Once the principal decides to add an authorized user, they must go through the application process. Issuers may have different requirements. The process typically includes the following steps:
The primary cardholder notifies the bank of their intent to add an authorized user
The account owner must inform their credit card issuer of their decision to have an authorized user. This may be done by phone, in person or online.
Provide necessary information
The principal may have to provide basic information about the person they wish to add as an authorized user. This may vary per issuer but usually includes the full name, date of birth, address and Social Security number.
Wait for the issuer’s approval
The processing time for adding an authorized user may vary per issuer. Some approve requests immediately, while others conduct identity verification first. Once approved, the card will be sent in the mail.
Set spending limits
Depending on the issuer, the account owner may be able to set spending limits on the authorized user’s card.
Benefits & Drawbacks for Account Owners
Adding an authorized user to a credit card can be advantageous for the principal account holder. However, it may also come with drawbacks. For example, it can help build credit.
On the other hand, irresponsible use and spending can end up hurting the principal’s credit history. It may even lead to debt.
- A good authorized user can help build credit.
- Given it helps build credit, this can help out a friend/relative.
- It keeps a credit card account active.
- Since the authorized user’s card is linked to the principal’s account, it can help earn more points and rewards.
- Irresponsible authorized users’ spending can lead to debt.
- There may be additional annual fee charges for adding an authorized user.
- Depending on the issuer, an authorized user may access account information.
- The account owner has sole responsibility for repayments. Purchases made through the authorized user’s card are charged to the principal’s account.
Benefits & Drawbacks for Authorized Users
Being an authorized user is generally beneficial. That’s especially true for individuals looking for a way to establish credit. However, there are risks. Before deciding to be added as an authorized credit card user, make sure you weigh the pros and cons first. It would also help to have a clear agreement with the account owner regarding using the card.
- A good way to build credit early on.
- It gives access to a credit card.
- It can help in establishing good money management skills.
- Not all banks may report transactions made by authorized users.
- It may hurt the authorized user’s credit due to late payments or running up a huge balance.
- It can have a negative effect on the personal relationship of the principal and the authorized user.
Being an authorized user can help you build credit. Once you’re ready to take on more financial responsibility, you may want to consider getting your own credit card. There are options available for different needs. For instance, many issuers offer student credit cards with features and perks for young adults.
Authorized User FAQ
Deciding whether to add an authorized user or be one can be a bit confusing. MoneyGeek answers some commonly asked questions to help you better understand what an authorized user on a credit card is.
Adding an authorized user on a credit card comes with benefits and risks. MoneyGeek consulted industry experts to share their insights to help you better understand how authorized users work.
- What are some common and expert ground rules principal cardholders should set with their authorized users?
- Family members, especially children and/or spouses, are usually made authorized users. In what situations can sharing a credit card's utility be beneficial for family members?
Credit Literacy Coach & Content Creator at themoneyplug.co
Education Manager at Debt Reduction Services, Inc.
If you want to learn more about credit cards, how they work and the different types available, the following guides can help you get started with your credit-building journey.
- Credit Score: Find out how credit scores are calculated, why they’re important and how you can improve your credit.
- Credit Card Terms: Learn about the different terms, concepts and fees associated with credit cards.
- Guide to Your First Credit Card: Are you considering getting your first credit card? Use this guide to help you find the right credit card type for your needs.
- How Credit Card Interest Works: Failure to pay your credit card dues in full every month may lead to the accrual of interest. Learn the different types of interests and discover how to avoid them.
- How Credit Card Works: Learn the basics, pros and cons of credit cards and get tips on how to best use them.
- Student Credit Card With No Income: Are you a college student thinking of getting a credit card? Discover ways to get one even if you don’t have a job.
About the Author
Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, credit card issuer, hotel, airline, or other entity.
Advertiser Disclosure: MoneyGeek has partnered with CardRatings.com and CreditCards.com for our coverage of credit card products. MoneyGeek, CardRatings and CreditCards.com may receive a commission from card issuers. To ensure thorough comparisons and reviews, MoneyGeek features products from both paid partners and unaffiliated card issuers that are not paid partners.