2 Pros and Cons of Adding Your Children as Authorized Users on Your Credit Cards

Credit card usage is a very common thing among U.S. consumers. As of the fourth quarter of 2022, Americans had a total credit card balance of $930 billion, according to TransUnion.

You might have several credit card accounts in your name. But if you have older kids, they might have a really hard time getting a credit card -- even if they're already 18.

At that point, you have an option. You could add your children as authorized users on your credit cards until they're able to qualify for a credit card of their own. But is that a good idea? It's debatable. Here are the pros and cons to consider.

Pro No. 1: You can help your children establish a credit history

You can generally qualify for a credit card in theory once you turn 18. But if you don't have any sort of work or payment history, then a credit card company may not want to take a chance on you.

If you add your kids to your credit cards, they'll have a chance to build up a credit history. That could make it easier for them to function as adults, whether in the form of qualifying for a loan or renting an apartment when the time comes.

Pro No. 2: You can teach your children the importance of spending limits

Some people see a credit card as a license to spend whatever they want. By making your kids authorized users on a card of yours, you have a prime opportunity to teach them that this isn't the case. You can set a spending limit they have to adhere to and even threaten to take away their privileges or make them dip into their own savings to pay if they exceed it.

Con No. 1: If your children don't follow your rules, you'll be the one on the hook for the higher bills

You might put two children of yours on your credit card account and say that each has a $300 monthly spending limit. But if someone exceeds that limit, ultimately, you're the one who will be financially responsible. So let's say one of your children spends $500 instead of $300 and doesn't have the money to pay the difference. You could revoke that privilege so it's not an issue going forward -- but that doesn't address the extra $200 you'll then need to come up with.

Con No. 2: If you mismanage your credit card account, it could hurt your children's credit

You might hit a financial snag and find yourself paying your credit cards late. But if you fall behind on payments and get dinged for being late, it's not just your credit record that might be impacted. Your children's credit could take a hit, too.

Some parents will tell you that it's a good idea to add your children to your credit card accounts, while others might caution against it. Before you decide, think about your children's habits and personalities. Are they the type to follow rules and spend carefully? If not, you may want to hold off on making them authorized users. But if you trust your kids to respect your guidelines, adding them to your credit card accounts could do a lot of good things for them.