What Is an Authorized User on a Credit Card?
In plain English
An authorized user is a person added to an existing credit card account by the primary account holder. The authorized user receives a card in their name and can make purchases, but the primary cardholder is solely legally responsible for paying the balance. The account's history often appears on the authorized user's credit report, which can build or boost their credit profile.
How Does Being an Authorized User Help Build Credit?
When the primary cardholder has a long account history, low utilization, and a perfect payment record, being added as an authorized user imports that positive history to your credit file. This can raise your score significantly, even without you making any purchases. It is particularly effective for young adults or those with limited credit history who can piggyback on a parent's or spouse's established account.
What Are the Risks for the Primary Cardholder?
The primary cardholder bears full legal and financial responsibility for all charges made by the authorized user. If the authorized user overspends or the balance is not paid, the primary cardholder's credit is damaged. Adding someone as an authorized user requires a high degree of trust. Issuers allow the primary cardholder to set spending limits for authorized users on some cards.
Is Being an Authorized User the Same as Being a Joint Account Holder?
No. A joint account holder is equally and legally responsible for the debt, just like the primary cardholder. An authorized user has spending privileges but no legal liability. Joint credit cards are increasingly rare because they create significant legal exposure for both parties. Most issuers have moved away from offering joint accounts, making the authorized user route the more common option.
Frequently asked questions
Does being removed as an authorized user hurt your credit?
It can. If the account was one of your oldest or only accounts, removal will reduce your credit age and potentially your score. The impact is usually modest and temporary. You will not be penalized for balances on an account you were only an authorized user on, since you were never legally responsible for the debt.
Can creditors come after authorized users for unpaid debt?
No. Authorized users have no legal obligation to repay the debt on the account. Only the primary cardholder is liable. However, an authorized user's credit score can still be negatively affected if the primary cardholder's account falls delinquent, since that account history appears on both credit reports.
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Related terms
Credit Card
A credit card is a revolving line of credit that lets you borrow money up to a set limit for purchases, then repay it over time. Used responsibly, it builds credit and may earn rewards.
Credit Score
A credit score is a three-digit number that summarizes your creditworthiness based on your credit history. Lenders use it to decide whether to approve loans and at what interest rate.
Credit Report
A credit report is a detailed record of your borrowing and repayment history compiled by credit bureaus. It is the source data used to calculate your credit score.
Secured Credit Card
A secured credit card requires a cash deposit as collateral, making it accessible to people building or rebuilding credit. It works like a regular credit card and reports to credit bureaus.
Credit Builder Loan
A credit builder loan is a small loan designed to help people establish or improve credit by making regular payments that are reported to credit bureaus.