Authorized Users for Credit Cards

Being an authorized user allows you to use someone else’s account while building your credit.

Advertising & Editorial DisclosureLast Updated: 10/22/2022
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Last Updated: 10/22/2022

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.

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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:

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    Name

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    Date of birth

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    Social Security Number

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    Address (where the card will be sent)

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    U.S. citizenship status (depends on card issuer)

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    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:

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    Raise the credit limit

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    Add more authorized users

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    Close the account

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    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.

A mother is establishing her child as an authorized user.

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:

1

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.

2

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.

3

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.

4

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.

Key Takeaways

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Benefits
  • 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.
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Drawbacks
  • 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.

Key Takeaways

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Benefits
  • A good way to build credit early on.
  • It gives access to a credit card.
  • It can help in establishing good money management skills.
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Drawbacks
  • 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.
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READY TO TAKE THE PLUNGE?

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.

Expert Insights

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.

  1. What are some common and expert ground rules principal cardholders should set with their authorized users?
  2. 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?
Markia Brown
Markia Brown

Credit Literacy Coach & Content Creator at themoneyplug.co

Todd Christensen
Todd Christensen

Education Manager at Debt Reduction Services, Inc.

Related Content

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


Nathan Paulus is the director of content marketing at MoneyGeek. Nathan has been creating content for nearly 10 years and is particularly engaged in personal finance, investing, and property management. He holds a B.A. in English from the University of St. Thomas Houston.


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