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When someone adds you as an authorized user to their credit card account, you will get your own credit card with your name on the front or back. Beyond this convenience, there are other advantages to be aware of. Build credit with the help of someone else
The main benefit of becoming an authorized user on a credit card is the fact that you can lean on another person’s good credit to build your own. Provided the card issuer reports credit balances and payments to the , on-time payments made on the card by the primary cardholder will be added to your credit history and boost your score over time. Many parents add their teenage children as authorized users on their credit cards. They might give them a copy of the card to use for emergencies, or they might keep it tucked away for a few years. Either way, when the child turns 18 and is able to apply for their own credit card, they already have years of credit history to help them out. You don t have to get approved for your own card
Becoming an authorized user also lets you avoid having to apply for a card on your own, which is a major benefit if you currently have bad credit or no credit history at all. As a result, you can often get an authorized user card with better rewards or benefits than you could get otherwise. Boost the family rewards account
Two people using a credit card generally means higher balances, which means rewards tend to accumulate faster. If half of your household’s purchases are usually made with debit, combining forces with one rewards card will boost rewards earnings big time. This strategy can help couples earn rewards they can use together, such as cash back to offset a large purchase or travel points for a vacation. Here are some of the . Cons of being an authorized user
With every financial decision there are potential pitfalls. Consider these and how you can avoid them before you become an authorized user or add one to your credit card account. The primary cardholder takes full financial responsibility
First off, you should know that the person who originally had the credit card is solely responsible for all purchases made. This is true even if the authorized user promises to pay off their charges but fails to do so. At the end of the day, authorized users are not legally responsible for paying off anything they buy with the card. For that reason, it’s important that the primary cardholder trusts the authorized user to use the card responsibly. And even then, there’s always a degree of risk. The good news is that you can always or lock their card if you’re unhappy with their card usage. Some credit cards even let you set spending limits for authorized users. Credit mishaps can hurt your credit score
It’s also important that the authorized user trusts the primary cardholder. Late payments and other credit mishaps can of both the primary account holder and the authorized user. If you decide to become an authorized user on someone else’s account, make sure you only do so with someone who has a long history of responsible credit use. You won t earn your own rewards
If you become an authorized user on someone else’s credit card, you should also know that the primary cardholder will get all the rewards. This may not be a big deal if you’re strategically pooling points with a partner or a spouse, but it can be a bummer if you were hoping to earn rewards you could use as you please. Frequently asked questions FAQ
What are some alternatives to becoming an authorized user
If you are thinking of becoming an authorized user but you are also considering getting a credit card of your own, you should know that some alternatives exist. For example, you may be able to qualify for a if you’re willing to put down a small cash deposit as collateral. You can also consider other or that may be easier to qualify for.
What happens if the authorized user doesn t pay me back
The primary cardholder is 100 percent responsible for repaying all purchases made by authorized users on their card. This means that, if an authorized user doesn’t pay you back, you don’t have any recourse.
How much will my credit score go up if I become an authorized user
The benefit to your credit score can vary depending on a whole host of factors. However, there’s a good chance your credit score will improve over time if the primary cardholder makes on-time payments on their card each month.
Does removing an authorized user hurt my credit
on a credit card won’t have any impact on the primary cardholder’s credit score. It may decrease the authorized user’s credit score because it will decrease their available credit and their average age of accounts, two main . The bottom line
There are several reasons to become an authorized user on another person’s credit card account, but the most common benefit is building credit when you can’t qualify for a credit card on your own. It’s a good option if you don’t have many others, but there are risks for both parties. Before you become an authorized user, find out if you can qualify for a credit card of your own. The best can offer the credit-building opportunity you’re looking for, too. Consider using to see if you’re prequalified for a credit card that could help you build credit, earn rewards or both. SHARE: Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Related Articles