4 Situations Where Adding an Authorized User to Your Card Makes Sense
- Adding an authorized user can make it easier to reach a sign-up bonus requirement.
- Some cards may offer bonus rewards just for adding an authorized user.
- Authorized users can take advantage of many of the perks from travel rewards cards.
Being an authorized user can really pay off if you play your cards right.
Credit card authorized users are folks added to your credit card account who are authorized to make purchases. They receive their own card linked to the account and can swipe or tap as if it were their account.
Legally, however, it's definitely not their account. And that distinction is why adding an authorized user to your credit card is a fairly serious decision.
Authorized users have lots of power -- but no responsibility. They can spend, spend, spend, but aren't required to pay anything at all. All of the financial responsibility for the balance, legally speaking, rests on you, the primary cardholder.
Assuming, however, you can trust your authorized user not to abuse the privilege, there are definitely times when adding an authorized user not only makes sense, but could be a very good idea indeed.
1. It makes it easier to earn a sign-up bonus
This one most likely applies to couples, especially those who already share finances. But it could also potentially work with a friend or relative you really trust.
Most credit card sign-up bonuses have a spending requirement you need to meet to earn the bonus. If you can meet it with a single user, great. But in most couples, purchases are made by both members.
Making your partner an authorized user means their card spend will count toward the overall spending requirement. Even better, that spend will also earn the same purchase rewards you earn as the primary cardholder.
In some cases, you may be better off with both partners getting their own card, rather than essentially sharing an account. For example, if you can meet two sign-up bonus requirements, then having each person open an account means double the bonus. This may also be the case if the card has a cap on certain rewards categories and you want to double-up on the rewards.
2. You get a bonus rewards offer
Every so often, you could get what is essentially a sign-up bonus for adding an authorized user to your existing account. Some offers may give you a bonus just for adding a person, while others will give you a bonus when your authorized user hits a certain spending requirement.
For instance, you may see something like this in your account: "Add an authorized user and earn 10,000 points when they spend $2,000 in the first three months."
These bonuses can be very useful, especially if it's for a card you'd put that spend on anyway. If you have a great grocery rewards card, for example, and your partner does the grocery shopping.
However, keep the opportunity cost in mind. If you could earn more rewards with that $2,000 by putting it on a different card -- perhaps with a regular sign-up bonus worth more than 10,000 points -- then wasting it on an authorized user bonus could mean missing out on rewards.
3. They can enjoy extra card perks
Many of the best rewards cards offer more than rewards; they also come with extra perks. This is especially prevalent when it comes to travel rewards cards. And many of these perks can be enjoyed not only by the primary cardholder, but also by any authorized users.
One of the most popular travel rewards card perks is probably airport lounge access. Airport lounge visits can easily cost $35 to $50 a pop, so this perk can save you a ton of money if you travel even a few times a year.
While many credit card lounge programs let you bring guests, there's usually a limit on how many you can bring. You'll also need to be present. By making your partner an authorized user, they can enjoy the same lounge access you do -- including their own guest passes. They'll also be able to access the lounge while traveling even if you're not traveling with them.
Beyond lounge access, you could also double-down on certain statement credits. Some cards that offer TSA PreCheck or Global Entry credits, for instance, offer the credits to both the primary cardholder and any authorized users.
4. It'll help them boost a thin credit file
If you're thinking of adding your teenager or college-aged child to your card, this is probably the reason why. Although authorized users aren't legally responsible for a credit card account, many issuers will still report the card history and balance to the credit bureaus for any users listed on the account, including authorized users.
For folks with a robust credit history, an authorized user account won't have much impact. But if you have a thin credit file -- i.e., little to no credit history -- being an authorized user on an older account with a positive payment history can help boost your credit. It probably won't get you from average credit to excellent credit, but it can certainly help you skip the bottom rung of the card ladder.
This is where it's time to reiterate the importance of only adding responsible people to your account. If your child hasn't learned some important financial basics -- like not maxing out their parent's credit card -- you may want to think twice before handing them the keys to the kingdom.
Watch out for extra costs
In addition to considering if your authorized user is trustworthy, there's another big consideration: the cost. If your card has no annual fee, then adding authorized users is probably free.
But if your card charges an annual fee for you, there's a good chance it'll charge an annual fee for your authorized users, too. This is particularly common with the fancy travel rewards cards with lots of perks. They tend to charge an annual fee for authorized users that can get as high as $175 each.
While these fees can be worthwhile -- unlimited lounge access can easily be worth more than $175 if you use it enough -- it's worth crunching the numbers. If you (both) won't get your money's worth from the extra fee, reconsider your options.
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