What Is an Authorized User on a Credit Card?

An authorized user on a credit card is an individual granted permission to use an existing credit card account by the primary cardholder. This arrangement allows the authorized user to make purchases using a card typically issued in their own name, linked to the primary account. The primary cardholder maintains full control and responsibility for the account, including all charges incurred. This setup is distinct from a joint account, where both parties share legal liability for the debt.

Understanding the Authorized User Role

An authorized user receives a credit card tied to a primary cardholder’s account. While they can use the card for transactions, they are not legally responsible for the debt. The primary cardholder holds sole legal liability for all charges, meaning creditors cannot pursue an authorized user for unpaid balances.

Authorized users often receive a physical card with their name on it, allowing them to participate in the account’s spending activities. However, authorized users cannot make changes to the account, such as requesting a credit limit increase, changing contact information, or adding other authorized users. They also cannot close the account or redeem accumulated rewards points.

This arrangement is commonly used among family members, such as parents adding a child or spouses sharing an account. Some card issuers have age requirements for authorized users. The primary cardholder does not typically need to undergo a credit check for the authorized user.

Operational Aspects of Authorized User Accounts

When an authorized user makes a purchase, the transaction appears on the primary cardholder’s monthly billing statement alongside their own transactions. The primary cardholder remains solely responsible for managing the account, including making all payments on time and maintaining its good standing.

The physical card issued to an authorized user displays their name, but it is linked to the primary account number. Some credit card issuers itemize purchases by the specific card used, which can help primary cardholders track individual spending.

The credit limit and account balance are managed centrally under the primary account. Authorized users do not have their own separate credit limits. The primary cardholder is accountable for the entire balance, including any spending by authorized users, and must ensure timely payments to avoid late fees and negative credit reporting.

Credit Implications for Both Parties

The authorized user arrangement can impact the credit scores of both the primary cardholder and the authorized user. For the primary cardholder, their credit score can be affected by the account’s overall management, including authorized user spending habits. High credit utilization or late payments can negatively impact the primary cardholder’s credit standing.

For the authorized user, being added to an account with a positive payment history and low credit utilization can help establish or improve their credit profile. Many credit card issuers report authorized user account activity to the major credit bureaus, such as Equifax, Experian, and TransUnion. This can contribute to the authorized user’s credit history, potentially boosting their credit score, especially for those with limited or no prior credit.

Conversely, if the primary cardholder’s account exhibits negative activity, such as missed payments or high balances, this can also negatively affect the authorized user’s credit score. The impact on the authorized user’s credit depends on whether the credit card issuer reports authorized user activity and how consistently the primary account is managed. Some issuers may not report negative information for authorized users, or they may only report positive activity.

Adding and Removing an Authorized User

Adding an authorized user to a credit card account is a straightforward process initiated by the primary cardholder. This can be done through the credit card issuer’s online account portal, by calling customer service, or by submitting a form. The primary cardholder will need to provide the authorized user’s full name, date of birth, and sometimes their Social Security Number.

Some card issuers may not require a Social Security Number for adding an authorized user, though providing it can ensure account activity is reported to the credit bureaus. Once submitted and approved, a new card bearing the authorized user’s name is mailed to the primary cardholder’s address. There may be an annual fee associated with adding an authorized user, depending on the credit card product.

Removing an authorized user is also a simple procedure. The primary cardholder can remove an authorized user by contacting the credit card issuer via phone or through their online account. If an authorized user wishes to be removed, they can contact the credit card issuer directly. This action can take effect quickly, and it is advisable for the primary cardholder to request a new card number if the authorized user had access to the old card.