How to Add Authorized Users on Credit Cards
Updated
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A credit card is traditionally a one-person phenomenon. The name of the person who applied will be on the card, and they're the only one authorized to use it. The account holder can, however, make other people authorized users on the account.
Although this has benefits for both parties, it can be risky. In this guide, we'll define authorized users, discuss how to add one, and answer other common questions about this credit card feature.
An authorized user is someone you, the credit card owner, give limited access to your credit card. You do this formally by adding an authorized user through your account portal. Once you add an authorized user, your issuer will mail them a separate card that draws from your credit line. The account owner is ultimately responsible for paying the bill -- not the authorized user.
Authorized users can make purchases and sometimes redeem rewards. They cannot cancel the credit card, change the billing address, or take any other account action.
There are a few ways to add authorized users to credit cards. You can typically do so online. For example, here is how you'd an an authorized user in the Discover app:
Personal information you'll need to enter includes name, date of birth, and the Social Security number (SSN) of the authorized user. You will likely need to provide this information even if you add an authorized user by calling the number on the back of your credit card.
If you'd like extra guidance, you can call the number on the back of your credit card to get a customer service member to help you add an authorized user. A customer service number may also be on your credit card provider's website.
TIP
Consumers often get cosigners and authorized users confused, but these are two different things.
When someone can't get a credit card because their credit score or income isn't high enough, a cosigner with better credit or higher income can apply with them to help them get the card. The cosigner also agrees to pay credit card bills if the primary account holder can't or won't.
Not every card issuer allows cosigners on applications.
You can help family and friends boost their credit scores by adding them as authorized users. Most card issuers report authorized user activity to credit bureaus. Not all do, though. To find out, you can call your card issuer and ask whether it reports authorized user activity to credit bureaus.
However, adding an authorized user to your account only helps their credit score if you make on-time payments, maintain a low credit utilization ratio, and practice good credit habits. If you make decisions that hurt your credit, you could hurt the credit of the authorized user.
There are two systems that determine how much missed payments and high credit utilization can hurt the credit score of authorized users. The FICO system allows negative credit card activity to affect the credit score of any authorized user on the card. Under the VantageScore system, negative data doesn't always affect an authorized user's credit.
Having an authorized user on your credit card comes with a handful of benefits both for the account holder and the user.
Example: Say you have a 13-year old daughter who wants to spend money with friends. You can add her as an authorized user to a credit card with a low $1,000 limit. That way, she can spend on your dime without constantly asking you for cash. You and her come up with a $100 budget so she can practice spending responsibly. It's a win-win for both parties.
There's one risk of adding an authorized user to your credit card, and it's a big one -- you're responsible for paying the bill for purchases made by authorized users.
In a worst-case scenario, your authorized user could max out your credit card. That would raise your credit utilization, potentially lowering your credit score. You'd also have a large credit card bill to pay. You could remove them from your account, but the damage would be done.
To protect yourself, it would be wise to limit authorized users to those who you trust to spend responsibly, and to give them access to cards with relatively low credit limits. It's also wise to set spending rules and request they talk with you before making big purchases.
There are situations when it makes sense to add an authorized user to your credit card. It could work out well if you and your partner want to combine your finances. It's also a great way to help your children establish credit for the first time.
It's not a decision to take lightly, though. Unless you pick a credit card that allows a spending limit for authorized users, anyone you add will have full access to your card's credit line. (You can add authorized users to cards with low limits to minimize worst-case scenarios.)
The safest rule is to only add an authorized user if you trust them completely with your credit card. After all, you'll ultimately be responsible for paying the bill. It's tricky to trust those who've never used credit cards before; a Plan B can help you prepare in case of an emergency.
A good Plan B is to ensure you have enough savings or income to repay overspending fast. An emergency fund is useful for repaying maxed out cards quickly. Draw from emergency savings to avoid expensive interest payments and potential hits to your credit score.
New credit users can apply for secured or student credit cards to build their credit scores. These cards are typically more limited than usual, but they are easy to get approved for. You can get approved for a secured credit card even when you have no credit score yet.
Your credit score won't change just because you added an authorized user, but the user's activity on your account can affect your credit. The most likely way this would happen is if your authorized user overspends and uses a large portion of your available credit. This will raise your credit utilization ratio, which can decrease your credit score.
If the main account holder practices poor credit habits, authorized users could see their credit scores drop. For best results, all users should practice smart credit habits, including paying off the credit card bills on time.
The minimum age for authorized users depends on the credit card issuer. Some issuers have minimum age requirements of 13, 15, or 16, while several others have no minimum age requirement at all. It's best to check with the issuer you're considering adding an authorized user with to be sure.
Sort of. Minors typically can't build credit scores, but they can build credit reports. Credit report information is used to generate credit scores when minors turn 18, the age at which you can take out loans or apply for credit cards.
No. Credit bureaus consider information on your credit report when generating credit scores.
Your identity, existing credit, public record, and inquiries about you all appear on your credit report, according to the Federal Reserve.
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