How Do Authorized Users on Credit Cards Work?

Adding an authorized user to a credit card is common and offers several advantages for everyone involved. As with joint credit cards, though, this isn't always the best choice, especially if either one of you has unhealthy spending habits.

Here, we explain how to add an authorized user, discuss the credit implications, and list the ways to add or remove someone from your account.

What is an authorized user on a credit card?

An authorized user is someone that you allow to use your credit card account. You'll typically inform your card issuer that you'd like to add someone – like your partner or child – and they'll issue that person a supplementary card.

Since this new card is tied to your account, the authorized user has access to the same shared credit limit. But because they aren't the primary cardholder, they aren't liable for making payments. That responsibility falls on you.

Authorized user vs. joint account

There are similarities between an authorized user and a joint account. Both are accounts where the funds (or credit) are shared between the individuals who have access.

With a joint account, however, both users are responsible for paying account fees and making on-time payments. This differs from an authorized user, who can use the credit card but isn't on the hook for repayment.

Authorized user vs. supplemental cardholder

For all intents and purposes, authorized users and supplemental cardholders are the same thing. Both can spend from the account, but they aren't liable for repayment.

Card issuers usually pick one of these terms and stick with it.

Pros and cons of authorized users on credit cards

Adding an authorized user to your credit card is pretty simple and can make shared finances easier to manage, but the credit score risks are considerable for the account holder.

Here are some pros and cons to consider before adding an authorized user to your credit card:

Pros and cons for the primary cardholder

• Streamlined finances: The primary account user can easily log in and track purchases made by the authorized user. This can be handy if you share a household budget.
• Maintains control of the account: Since the primary cardholder is responsible for repayment, they can also remove authorized users, discuss the credit limit with the issuer, and access rewards.

• Responsible for repayment: The authorized user isn't financially liable for paying off the purchases they charge to the card. All repayment obligations fall to the primary cardholder.
• Risks their credit score: If one of the cardholders exceeds the credit limit, everyone's credit score can suffer – including the primary cardholder's.

Pros and cons for the authorized user

• Gives access to credit: If someone can't qualify for credit on their own, making them an authorized user could help them access credit. If they already have 1 or 2 credit cards, adding them as an authorized user can help improve their credit limit and utilization ratio.
• Improved credit score: Authorized users are usually reported to the 2 major credit bureaus. As long as the primary cardholder makes payments on time, authorized users should see their credit scores improve.

• Authorized user fee: You'll often be charged a fee for adding an extra cardholder to your account. It's usually $50 – $60, though it depends on the card and the bank. No-fee cards typically don't charge extra fees for extra cardholders, and some cards with annual fees don't charge for authorized users.
• Risks their credit score: Since authorized users don't control repayments, they're relying on the primary cardholder to make regular payments and not max out the card. If the primary cardholder isn't responsible with credit, the authorized user's credit score can drop.

Does an authorized user affect your credit score?

Giving an authorized user access to your account can impact your credit score.

If the authorized user goes over your spending limit, your credit score could take a hit. Your credit score could also drop if the account misses payments or pays late. This could happen if an authorized user spends more than expected and you can't cover the balance.

Exceeding your credit limit and missing payments are actions typically reported to the credit bureau. Since the account is in your name, you're ultimately responsible for the balance, and any negative activity can affect your credit score.

Keep in mind these are worst-case scenarios. If your authorized user is trustworthy and responsible, adding them to the account shouldn't negatively impact your credit score.

Responsibilities of an authorized user

The primary cardholder is ultimately financially liable for the credit card account, but the authorized user has responsibilities, too.

Here are a few expectations that you might decide on together:

• Sticking to a spending limit: If you want to place limits on how much the user can charge in a given month, make it clear. Some cards let you set separate transaction limits, but if this feature isn't available, tell the user the account credit limit so they don't exceed it.
• Making payments for purchases: The best way to make sure a payment is made on time is to make it yourself. It's often easiest to pay the entire statement balance and then ask your authorized user to transfer you their share. But in some cases, an authorized user can make payments directly from their bank account. Just make sure they know when the payment is due.
• Checking the account: Credit card issuers usually let authorized users log in to track purchases and monitor spending. Help your authorized user get set up so they can monitor their credit card use.

How to add an authorized user to a credit card

Once you're sure that you and the person you want to add are on the same page about finances, reach out to your credit card issuer. Some issuers allow you to add an authorized user online, while others require you to call.

You'll typically need to provide the authorized user's:

• Full name
• Address
• Date of birth
• Relationship to you
• Occupation

If you want to set a spending limit for the authorized user, ask your issuer if this is an option. If it's not, you'll need to clearly communicate spending limits with the user. While you're at it, you should also discuss how they'll pay for the purchases they make.

The credit card issuer will send a credit card to your authorized user. Once they activate the card, they can access the credit.

How to remove an authorized user from your credit card

Some credit card issuers allow you to log into your account and remove an authorized user yourself, or chat online with an agent who can process the request.

If you don't have the online option, call the customer service number on the back of your credit card and ask an agent to remove the authorized user.

Pro tip: If you have the banking app, you might be able to quickly remove the authorized user by accessing the account on your phone.

FAQ

What is the point of having an authorized user on a credit card?

Adding an authorized user to a credit card mostly benefits the new user. They get access to credit and can build a solid credit score as they establish a credit history. That said, it depends on both of you using the card responsibly.

Is there a downside to adding an authorized user?

The biggest downside is tracking the authorized user's spending to ensure they don't go over your credit limit. Some banks allow you to set transaction limits, but not all. If you expect the authorized user to repay purchases, you'll need to discuss finances and repayment terms.

Does adding someone as an authorized user help them build credit?

Adding an authorized user can help them build a good credit score, so long as neither of you max out the credit card and you always make at least the minimum payment on time. If you struggle with debt or timely repayments, their score could drop.

Is being an authorized user on a credit card a good thing?

If you're new to credit or trying to rebuild a poor score, being added as an authorized user can really help you repair or build a credit score – so long as the primary cardholder makes regular minimum payments and doesn't exceed the card's credit limit.

How do I get off of being an authorized user on a credit card?

If you've decided to cut ties with the primary cardholder's account, contact the credit card issuer. You can find a customer service number on the back of the card. Make the call, verify your identity, and ask to be removed as an authorized user.