Credit Card Authorized Users: What to Know

Sarah Tecla, Preferred Banking Office Assistant Manager, First Republic Bank
September 13, 2022

  • Becoming an authorized user can be a good way to build credit, giving users access to a credit card account and an opportunity to improve their credit scores. 
  • By adding an authorized user, primary cardholders assume responsibility for the purchases made on the card. 
  • Both primary account holders and authorized users must practice good credit management to realize the benefits to their scores. 

Having good credit is an important part of achieving financial stability, and becoming an authorized user — joining a trusted friend or family member’s credit card to make purchases on the account — is one avenue through which someone can build their credit history. 

Authorized users can make purchases on a credit card and benefit from the primary cardholder’s credit history. However, adding an authorized user can be risky for cardholders and the arrangement requires trust. 

Below is an outline of what being an authorized user entails, how to add authorized users to your account, and how activity on the card can affect all parties’ credit scores. 

What is an authorized user on a credit card?

An authorized user on a credit card is anyone added to the primary holder's account. This grants the authorized user use of the card and the potential to benefit from the primary cardholder’s strong credit history. A parent may add their child to the card — and can check with the card issuer to inquire about any potential minimum age requirements — to cover purchases and build their credit, for example. 

Generally, anyone may be added as an authorized user on a credit card. However, each card issuer may have guidelines or rules that primary cardholders must adhere to when adding authorized users to their accounts. 

Joint account holder vs. authorized user

Being an authorized user differs from holding a joint account holder on a credit card. Authorized users aren't liable for purchases made on the card — that responsibility falls on the primary account holder. Joint account holders, in contrast, are both liable for the credit behavior on their shared account. 

How credit card authorized users work

Authorized users can make purchases using a credit card, including purchases in-store and online. However, authorized users aren't liable for use of the account. This means authorized users should set up repayment plans with the primary cardholder directly to cover their charges and generally use the card as a way to develop positive financial habits. 

For primary cardholders, adding an authorized user to the account comes with risk: By adding an authorized user, you're accepting the liability for any purchases they make using the card. If you're the primary cardholder, you'll be responsible for paying the card balance, even if the authorized user fails to cover their expenses or reimburse you for their use of the card.   

How to add an authorized user to a credit card

In most cases, adding an authorized user is easy and can be done over the phone, online or through the issuer’s mobile app. Some card issuers may allow you to set spending caps — also called a credit limit — for authorized users, which may limit the primary cardholder’s financial risk. 

When adding an authorized user to the account, it's best practice that the primary cardholder should create an agreement with the authorized user to outline the appropriate use of the card. Set ground rules about how the card may be used and consider agreeing on a repayment plan for the authorized user’s purchases on the card. 

How to remove an authorized user from a credit card

Primary cardholders can remove an authorized user from their credit card at any time, often through the card issuer's online portal, mobile app, or phone support. Authorized users can also opt to remove themselves from the card by contacting the credit card issuer. They may need account information, such as the card number, so they can be removed from the credit card account. 

How an authorized user affects your credit

Becoming an authorized user allows you to “piggyback” on the primary account holder’s credit history. The credit card account’s full history will appear on the authorized user’s credit report, and the credit score of both the primary credit card holder and the authorized user may be influenced by activity on the account. 

In many cases, this is a significant benefit for authorized users. For example, parents with a strong credit history may add their child as an authorized user to begin building up the child’s credit history. However, poor user activity on the account may negatively impact your credit score

For this reason, both primary cardholders and authorized users need to develop smart financial habits and build credit through responsible use of the card. This means:

  • Being mindful of payment history: Late or missed payments can negatively impact one’s credit and lower the credit score of primary account holders and authorized users on the account.
  • Knowing when balances are due: Although an authorized user is not liable for repaying the balance on the card, missed payments will negatively affect their credit. 
  • Maintaining a healthy credit utilization ratio: Your credit-utilization ratio, or the percent of the maximum available credit you're using, can influence your score. Both primary cardholders and authorized users should avoid “maxing out” cards and aim to maintain a debt-to-available-credit ratio of less than 30%. 

Do credit card authorized users build credit?

Becoming an authorized user provides you with an opportunity to build credit and boost your credit score — but only if both the authorized user and primary cardholder use the card responsibly. Primary cardholders and authorized users should create an agreement that ensures payments are made on time and set limits on the use of the card to maintain a responsible credit-utilization ratio.  

Is credit activity from an authorized user reported to credit bureaus?

Many, but not all, credit card companies report activity on the card to the authorized user’s credit report. In many scenarios, this is a benefit — it's why creating an authorized-user account can help one build credit. However, you should check with your credit card issuer to confirm if they report activity on the account to the three main consumer credit bureaus.

How many authorized users can be on a credit card?

Generally, primary account holders can add several authorized users to their accounts. Each card issuer has its own guidelines. Some cards may allow you to add just four authorized users, while others may allow nine or even more. Contact your credit card issuer for details specific to your card. 

The bottom line

Adding an authorized user to a card comes with risks and benefits for the user and the primary cardholder. For cardholders, adding authorized users means assuming the liability for purchases they make using the card — even if they fail to follow your informal repayment agreement. However, it can help a trusted family member or friend benefit from your strong credit history and allow an opportunity to build up their credit. 

Authorized users are exposed to credit score risk if the user activity on the card is poorly managed. It's important to choose a primary cardholder with strong credit who can improve your credit score and avoid becoming an authorized cardholder for a primary cardholder with poor credit.

Ultimately, it all comes down to trust, and both parties must use the account responsibly to build credit together. Exploring multiple credit options — like opening a secured credit card, which allows users to make a cash deposit to access credit — can help you assess if adding an authorized user to your account is the right choice for you.

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