An authorized user is someone who can make charges to the credit card but is not responsible for the payment. How many authorized users can be on a credit card will vary by the card issuer and the card. For many major credit cards, the limit is four, but some do not have a limit. For business credit cards, the limit is higher. Many business credit cards allow up to 99 authorized users.
What is an authorized user on a credit card?
An authorized user is using someone else’s credit card but is issued a new card in their name. This can be a spouse, child, friend, business partner, or employee. Authorized users are not responsible for card payments. Even with a card in their name, the credit account still belongs to the primary card holder.
Authorized users are different from a joint credit card or a co-signer. In those cases, both users are account owners.
What can an authorized user do with your credit card?
Authorized users can charge purchases with their authorized user credit card. They cannot change the account, like requesting a credit limit increase or adding other authorized users. Authorized users are not responsible for the debt generated on the credit card. Payments are the responsibility of the primary cardholder.
Pros and cons of authorized users
If you’re considering either adding authorized users or becoming an authorized user on someone else’s credit account, it’s important to consider the pros and cons. Here are a few major benefits and downsides:
Benefits of authorized users
A major benefit to add authorized users is building a credit score. Authorized users benefit from the primary cardholder’s credit history. Adding kids or trusted people without a credit history, as authorized users can be a way to build their credit score.
One way to do this is to add an authorized user to keep it active on a rarely used card. Some people will even pay to be an authorized user.
Other benefits of authorized users:
- Allows multiple family members to share one card account.
- Each family member can have a card in their name, allowing greater flexibility when making charges.
- On reward credit cards, you can earn more rewards.
- Keeps rarely used accounts active
- On cards that charge an annual fee, save on annual fees.
Cons of authorized users
The main disadvantage of adding authorized users is the risks. You are legally responsible for purchases made by an authorized user, even if they did not check with you before making a charge. For this reason, conflict may arise in relationships if things go poorly.
In addition, some cards charge an additional fee for adding an authorized user.
Disadvantages of authorized users:
- Risk of overspending or unauthorized charges.
- In some cases, additional card fees for an authorized user.
- Possible relationship conflicts over charges or authorized user credit card use.
Can being an authorized user help build credit?
Yes! Being an authorized user can potentially build credit – so long as it’s reported to the credit bureaus. Most major credit cards do report to credit bureaus, allowing someone with low or no credit to quickly build a better credit score.
Which credit card companies report authorized users?
Most credit card companies report added authorized users. All credit card activity, like low credit utilization, on-time payments, and credit history, can benefit the authorized user’s credit report. You can check with your credit card company to confirm that they report authorized users.
How to add authorized user to credit card
The primary cardholder can add an authorized user over the phone or through an online account. To add the authorized user, you will need their social security number if they have one. Many credit card companies require authorized users to have a social security number, others only ask for basic information.
After adding the authorized user, many credit card companies will send an additional card to the primary cardholder’s residence. The primary cardholder can then decide whether to give the card to the authorized user or just to let them get the credit benefits.
Can you add an authorized user without a Social Security Number?
Some credit card companies allow the addition of authorized users with only the name, date of birth, and address. This varies by the credit card company. For example, in the case of non-US citizens, credit card companies will often make an exception for the social security number requirement.
Can an authorized user take over a credit card account?
No, an authorized user cannot take over a credit card account. However, some cards allow authorized users to access their own online portal to see charges made on the card in their name. Authorized users cannot make changes to the account, including adding another authorized user or requesting a credit limit increase.
Do authorized users get their own card?
Depending on the credit card company, some authorized users do get their own card. When a card is issued in the name of the authorized user, it is usually sent to the primary cardholder’s residence. This allows the primary cardholder to decide whether or not to give the card to the authorized user.
Authorized users summary
Adding an authorized user to a credit card can have benefits in a variety of settings. For authorized users, there can be benefits to their credit score. For the primary cardholder, the simplicity of managing all charges in one place can be a benefit.
For families, giving kids a head start with a good credit score is a smart way to add authorized users. For businesses, having several business-authorized user credit cards in the names of those responsible for making purchases can be a practical solution.
Does removing an authorized user hurt their credit score?
Removing an authorized user can hurt their credit score, at least temporarily. Whether and how much it hurts the authorized user’s credit score will depend on their own credit history, including on-time payments.
Will adding an authorized user hurt my credit?
No, adding an authorized user cannot hurt your credit score, unless it significantly changes your spending habits. For example, if adding an authorized user leads to too much debt or exceeding your credit limit, it can hurt your credit score. However, if the authorized user only charges within agreed-upon limits and you continue to pay your credit card bills on time, it will not hurt your credit score.
Can an authorized user make payments?
Authorized users can only make charges. The primary cardholder must make credit card payments and perform any other card activities like redeeming rewards or requesting a credit line increase.