What Is an Authorized User on a Credit Card?

Adding an authorized user to a credit card allows another individual to make purchases using your account. This arrangement is often used by families or individuals who want to extend credit access without making someone a co-owner of the debt. Understanding this role is important for both the primary cardholder and the authorized user. It offers benefits, especially for building credit history, but also carries distinct responsibilities and potential impacts.

Defining an Authorized User

An authorized user is an individual granted permission by a primary credit cardholder to use their credit card account. This person receives a card bearing their own name, linked to the primary account, and can make purchases. While they can use the card for transactions, they are not legally obligated to repay the debt incurred on the account. The legal responsibility for all charges, including those made by the authorized user, rests solely with the primary cardholder.

This differs significantly from a joint account holder, who shares equal legal responsibility for the debt and undergoes a credit check during the application process. An authorized user cannot access account statements, change account details, redeem rewards, or close the account. Their access is limited to making purchases, though some issuers may allow them to track spending or report a lost card.

Responsibilities and Account Access

This arrangement underscores the importance of trust and clear communication between the primary cardholder and the authorized user regarding spending limits and expectations. If the authorized user incurs debt, the primary cardholder is ultimately liable for its repayment.

An authorized user receives a physical credit card tied to the primary account’s credit line, enabling them to make purchases. While they can spend up to the available credit limit, they cannot perform account management actions such as paying the bill, checking the balance, or disputing charges. Their role is to utilize the credit, with the primary cardholder managing the account’s financial obligations.

Credit Reporting and Score Impact

Being an authorized user can influence an individual’s credit report and score, though the impact is not universal across all credit card issuers. When an issuer reports authorized user activity to the nationwide credit reporting agencies—Equifax, Experian, and TransUnion—positive account behavior, such as consistent on-time payments and low credit utilization, can help build or improve the authorized user’s credit history. This can be especially beneficial for individuals with limited credit history, like young adults, as it contributes to factors like payment history and length of credit history.

Conversely, negative activity on the primary account, such as late payments or high credit utilization, can adversely affect the authorized user’s credit score. Not all credit card issuers report authorized user activity, meaning the account may not appear on the authorized user’s credit report. For the primary cardholder, adding an authorized user does not directly affect their credit score, as long as they continue to make on-time payments and manage debt responsibly. However, if the authorized user’s spending leads to increased credit utilization or late payments, the primary cardholder’s credit score could be indirectly impacted.

Steps to Add or Remove an Authorized User

To add an authorized user, the primary cardholder needs to provide personal details for the individual, such as their full name, date of birth, and address; a Social Security Number may also be requested by some issuers. This process can be completed through the credit card issuer’s online banking portal, by calling their customer service line, or in person at a bank branch. After the information is provided, the issuer will mail a credit card in the authorized user’s name within 7 to 10 business days.

Removing an authorized user involves the primary cardholder contacting the credit card issuer directly. This can be done via a phone call to customer service or through a secure message within the online account portal. Once removed, the authorized user’s card becomes inactive, and the reporting of that specific account’s activity to credit bureaus for the authorized user ceases. However, historical data related to the authorized user’s past activity on that account may remain on their credit report for a period, up to seven years, depending on the credit bureau’s policies.