Understand the benefits and risks of adding another person to your credit card account.

Anyone you choose can be added as an authorized user on your credit card. Being an authorized user simply means they receive their own card with your account number and can make purchases. It can streamline finances for partners, families and businesses. However, be careful about who, if anyone, you authorize because there are risks.

When might you add an authorized user?

There are several situations when it makes sense to add an authorized user to your credit card. Often, partners who share finances, parents helping a child learn to manage credit or businesses that allow employees to make purchases do so.

You’re responsible for all charges and making timely payments

When adding an authorized user to a credit card you—the primary account holder—are responsible for any charges the other person makes. If your credit balance increases significantly or you can’t pay your bill on time, your credit score will go down. This risk means you should carefully consider someone’s trustworthiness before making them an authorized user. On the flip side, well-managed credit card activity can help boost your credit score.

Set expectations with your authorized user

Before adding anyone to your credit card, have a frank and detailed talk about what it means to be an authorized user. Specify how the card may be used and who pays the monthly bill. Make sure they’re in agreement with your expectations and know what happens if the card is misused.

Does adding an authorized user affect my credit?

Simply adding an authorized user doesn’t affect your credit score. What will affect your score is how much credit is used and if it’s paid back on time.

Can you put limits on authorized user spending?

You can set up guardrails to prevent overspending on your account. Some credit cards allow the primary account holder to set spending limits for authorized users. For example, a parent might limit their child to purchases with a $100 maximum.

Primary card holders can also set up text or email alerts to see when purchases are made. This type of monitoring can help provide peace of mind when you’ve added an authorized user.

Do authorized users build credit?

Someone with no or poor credit may be able to build credit as an authorized user. This will only happen if the card issuer reports the authorized user status to the credit bureaus. If the intent of adding an authorized user is to help that person improve their credit score, first ask your card issuer if they provide this information to Experian, Equifax and TransUnion.

Looking for a credit card?

If you want a personal credit card or a business credit card, take advantage of cash-back and low-rate cards from Consumers. Our online banking makes it easy to monitor activity as well as turn cards on and off so you’re always in control.

 

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