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  • What Is An Authorized User?

What Is An Authorized User?

How will adding an authorized user affect me?

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Did you know? Authorized Users

Did you know?

Using the authorized user system can help the authorized user build a strong credit history without the risks of managing a full account. Typically, as a cardholder, you would only take on an authorized user if you trust them to use the card responsibly. It is most commonly used with parents and their children to help young adults get a head start on their credit, providing them with a foundation for future financial success.

What is an Authorized User?

An authorized user is someone who is added to another person’s credit card account. For example, a mother elects to have her son added as an authorized user. The son now has access to the credit card, and the mother remains fully responsible for any charges made, as well as for making payments on the account. In doing so, the mother is helping her son build credit through the usage of her credit card. In most cases, Person A is helping Person B reap the benefits of being an authorized user.

Often times an authorized user is added as a family member, trusted friend, or a spouse, as this arrangement relies heavily on trust. The primary card holder would have to ensure the authorized user understands the responsibility of using the card.

Responsibilities of an Authorized User

Authorized users do not have any legal obligation to pay for charges on the account. However, their spending can still impact the primary cardholder’s ability to manage the account responsibly. It is best to view the pairing as a partnership. If the ultimate goal of the authorized user is to improve their credit score, it may be best to avoid using the car. By just having the name as an authorized user on the account, one can benefit from the positive credit history of the primary cardholder.

Benefits and Risks of an Authorized User

Benefits and Risks of Being an Authorized User

Benefits

  • Helps build credit history
  • Can improve credit score
  • No legal responsibility for payments
  • Great for those with little credit history

Risks

  • Spending affects the primary cardholder
  • Can lead to debt if misused
  • Limited control over the account
  • Primary cardholder's credit could be harmed

Frequently Asked Questions

Frequently Asked Questions

An authorized user is someone who is added to another person's credit card account. They can use the card but are not legally responsible for paying the balance. The primary cardholder is still responsible for managing the account.

If the primary cardholder has a good payment history and low credit utilization, their positive credit behavior can reflect on your credit report. This can help you build credit without needing to manage your own account.

No, an authorized user is not responsible for paying the credit card balance. The primary cardholder is fully responsible for any charges made to the account, including those made by the authorized user.

Yes, if the authorized user makes excessive charges or fails to use the card responsibly, it can increase the balance and affect the credit utilization rate, which may hurt the primary cardholder's credit score.

If the primary cardholder misses a payment, it can negatively affect both their credit score and the authorized user's credit score, as the account will be reported to the credit bureaus.

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