What Happens If I Add an Authorized User to My Credit Card?
Adding someone to your credit card account as an authorized user can help them create or recover their credit. But you also need to protect your own credit along the way.
Here’s what you need to know before entering into this arrangement.
The primary cardholder is solely responsible.
When you add someone as an authorized user, they can have their own card with their name. They can shop, but you need to make sure they pay for these costs.
You can make them pay you directly. You can also give them online account access so that they can make payments directly to the card issuer from their bank account.
But by law, the authorized user is not responsible for any payments or balances. Ultimately, the account balance and full responsibility for the card rests with you as the primary cardholder.
Obviously, you need to trust whoever you are about to add to your map. You should also have a plan for how they will actually use and pay for the account.
What happens to an authorized user credit?
Although authorized users are not responsible for purchases, the account will appear on their credit history. The credit limit, card balance, and payment history for that card will appear under their name, just like in your own credit report.
While the primary cardholder – in this case, you – is responsible for the account, any mistakes you make in damaging your own credit will also affect the authorized user’s credit, and vice versa.
If the main user misses payments or accumulates too much debt, the authorized user can remove their name from the account.
The credit history of the authorized user will not affect your
While you are responsible for the purchases and activities of the authorized user on your account, simply adding them to your account will not affect your credit in one way or another.
Their name and the fact that you added them as an authorized user will not show up in your report at all. But their behavior can affect your credit. For example, if your authorized user had a past debt that was not related to your credit score, this will not affect your own credit report or rating. But if your logged in user’s habits add a significant amount of balance to your account, you might see your account drop.
In general, adding an authorized user to your credit card account comes with a certain amount of risk, but it has to do with their financial behavior. When making a decision, think seriously about their financial habits and develop guidelines for using them and paying with a card.
This post was originally published in 2015 and was updated on May 28, 2020 by Lisa Rowan. Updates include the following: revised featured image, verified links for accuracy and links to relevant Lifehacker content, updated formatting to reflect the current style, and revised article for increased volume and clarity.