Adding an authorized user to your credit card account can be a great way to meet spending requirements, accrue more points and even help a beginner build their credit history. That said, there are also risks associated with adding an authorized credit card user.
It’s important to choose someone who is responsible and able to repay their debts, even if they’re not legally obligated to do so. That’s just the tip of the iceberg, so here is everything you need to know about authorized credit card users.
What is an authorized user?
An authorized user is a person who has been added to a primary credit card holder’s account. Authorized users receive cards with their names on them, linked to the primary cardholder’s account. They can use those cards to make purchases just like they would with their own cards.
Pros of adding authorized users
Adding authorized credit card users can benefit both the primary cardholder and the authorized user for a few reasons. An authorized user can help meet spending requirements on the primary cardholder’s account and establish a credit history early on.
Perhaps the best reason to add an authorized user is to take advantage of the various card benefits they offer.
Credit card issuers and products have various costs and extended benefits for authorized cardholders.
For example, you can add up to three authorized users for $175 (and then $175 for each additional authorized user after that) on the Citi® / AAdvantage® Executive World Elite Mastercard® (see rates and fees). This card grants each of them (plus two guests or immediate family members) access to Admirals Club lounges when flying American Airlines or its partners with a same-day boarding pass.
However, Admirals Club access for authorized users is more limited than the membership the primary cardholder receives.
Additionally, if you have authorized users on your Chase account, you can transfer your Chase Ultimate Rewards points to the authorized user’s loyalty program accounts. For example, this is great if you have a stash of Ultimate Rewards points you want to transfer to a family member’s United MileagePlus account.
United Airlines charges a fee to transfer miles between MileagePlus accounts. By transferring Ultimate Rewards points directly to an authorized user’s United MileagePlus account, you can avoid that fee.
While Chase allows household members to transfer Ultimate Rewards points to each other, in order to transfer Ultimate Rewards points directly to another loyalty account, the other account must be held by an authorized user on your Chase credit card.
Another way to benefit from having an authorized user on your card is with the American Express Platinum Card®. This card carries a flat $195 fee for each authorized user (see rates and fees).
However, this includes key benefits like lounge access, complimentary Marriott Bonvoy and Hilton Honors Gold elite status and more. Enrollment is required.
Some credit cards offer incentives for adding authorized users to your account. For example, some American Express cards offer bonus Membership Rewards points when you add an authorized user.
Cons of adding authorized users
The downside of adding authorized credit card users is that it may become more difficult to track spending when two people are using the same card.
Also, the primary cardholder is responsible for all charges to the account. So, if your authorized user goes on a spending spree and refuses to cover the charges, you’ll be on the hook for their purchases.
Making someone an authorized user carries risk. Only add an authorized user you completely trust, and be sure to communicate your expectations for repayment ahead of time.
What’s the minimum age for an authorized user?
Barring issuer-specific age restrictions, anyone can be an authorized user. American Express requires authorized users to be at least 13 years old and to have no accounts in default with the bank. Discover imposes a minimum age of 15, while U.S. Bank requires authorized users to be at least 13 years old.
Bank of America, Chase and Citi do not impose age restrictions, whereas Capital One and Wells Fargo have a minimum age of 18.
Can I remove an authorized user?
Removing an authorized credit card user is as simple as calling the issuer. Some banks, including Citi, even let you do it online. Once the user has been removed from the account, which typically takes minutes, their credit card becomes inactive.
However, it may take several weeks for the card to no longer be listed as an active account on your authorized user’s credit report.
How do authorized users affect a credit score?
Adding an authorized credit card user will not affect your credit score unless the additional card racks up significant spending and increases your credit utilization ratio.
Meanwhile, authorized users can see a positive credit impact by having access to an additional credit line and lowering their own credit utilization ratios. For those building a credit history, being an authorized user can be a huge boost.
It takes responsible people on both sides to mitigate the possible cons of adding an authorized user.
Related: Things to do to improve your credit score
Should you open a joint account or add an authorized user?
The difference between a joint account and an authorized credit card user is liability. Joint account holders share liability for charges, while authorized users do not.
Primary cardholders can also limit the amount of credit an authorized user can use. Joint account holders can access the full credit line together.
There isn’t much of an upside to joint accounts other than lessening the burden of liability on the primary cardholder. Ideally, you shouldn’t add anyone to your credit card (as an authorized user or joint account holder) unless you trust them to use it responsibly.
Bottom line
Adding an authorized credit card user can be useful for both the main cardholder and the added user. However, it’s important to be aware of the risks, as the last thing you want is to sour a relationship because of one person’s financial irresponsibility.
Only add an authorized user you trust to be responsible with your credit limit and who will pay their portion of the credit card balance on time.
Related: The benefits of adding a relative as an authorized user
For rates and fees of the Amex Platinum card, click here.
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.