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Can An Authorized User On A Credit Card Help You Build Credit?

Sarah Li Cain7-Minute Read
June 28, 2021

Building credit takes time and dedication, but there are some easy ways to start building yours today. The good news is that becoming an authorized user on another person's credit card can help you improve your credit score. That being said, there needs to be certain stipulations for that to happen, such as choosing a responsible primary credit card user. If you’re considering going this route as part of your plan to build credit, here’s what you need to know before getting started.

What Is An Authorized Credit Card User?

An authorized user is an additional user on a primary cardholder’s credit card. If you intend to be an authorized user, once your name is added to the account, the credit card issuer will send you a card with your name on it. However, since you’re not the owner of the account, you're ultimately not responsible for the payments in the eyes of the issuer — the primary cardholder is.

Just because you have a card doesn't mean you have to use it. It's best to make an agreement with the primary cardholder for how you plan on using the card, if at all. Even if you don't use the card, your credit will still be affected based on the primary user's behavior.

If you do end up making purchases on the credit card, develop a plan with the primary cardholder to figure out how both of you can use it responsibly. For instance, you promise to limit your spending to a certain amount on the card and make payments to the primary cardholder by a certain date.

Most people want to be authorized users because they may not be able to qualify for a credit card on their own otherwise, whether due to the fact that they don't have a credit history or have a low credit score. Being an authorized user can help raise a credit score in as little as a few months.

When you become an authorized user, you'll want to choose someone who is responsible with their credit because if the primary cardholder's score goes down, so will yours. Choosing a trustworthy individual is key. In the long term, you'll want to get your own credit card as lenders want to see if you can handle an account on your own.

How Many Authorized Users Can Be On A Credit Card?

There isn’t a set number of authorized users all credit card companies will allow on one credit card. The number will be different depending on your bank account and their requirements, which can include the minimum age of the authorized user. There may also be a significant limit difference between personal and company credit cards — though the latter may be called employee cards.

Considering different issuers will have different requirements, it’s best to check the fine print for the primary cardholder’s specific credit card, or contact the issuer for more information.

Can An Authorized User Take Over A Credit Card?

Credit card issuers consider authorized users as the secondary (or additional) user, therefore they don’t have ownership rights, even though they have access to the account. However, you do have some rights that are similar to those who are the primary owner of the account. For instance, you can use the card online and at brick-and-mortar retailers, withdraw cash advances, and remove yourself from the account. The list of what you can't do includes asking for credit limit increases, closing the account, changing the account's mailing address, and adding more users.

If you want ownership of an account, you can either apply for your own credit card (a secured card is a great idea for those with a low or no credit score). There's also what is called a joint account holder, when you'll also be considered a primary cardholder since you'll be officially responsible for payments alongside your other owner.

Whereas a primary cardholder can add an authorized user after applying for their own credit card, joint account holders have to apply for a credit card at the same time.

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How To Add An Authorized User To Your Credit Card

Adding an authorized user to a credit card is a fairly straightforward process. The following are the basic steps you’ll need to follow.

1.   Choose A Trustworthy Individual

Before adding an authorized user, make sure you can trust this person. Since they’ll have access to the account, you could be on the hook for purchases they make. That means if they’re to use your card, you want to make sure they’re responsible with their purchases and have a plan to pay you for what they charged.

It’s up to you who you want to add, but in most cases it’s fine to add your spouse, a trusted friend, and even family members you’re close with. No matter what, establish some clear boundaries and carefully consider any of their current or past financial behavior to determine whether it’s worth adding this person as an authorized user. Though there’s no legal age requirement, check with the credit card issuer to see what their policies may be.

2.   Login To Your Online Bank Account

In most cases, you can log in to your credit card account online and head to a dedicated section where you can update your information, including adding an authorized user. If that’s the case, follow the prompts on what you need to do. In some cases, you can send a secure message after logging in requesting that the credit card company add an authorized user.

There are also some credit card companies that allow you to add authorized users during the initial application process. You may also be able to call the credit card company to add an authorized user. In this case, have all the necessary information ready.

3.   Provide The Proper Information

You’ll need to provide the necessary information for your authorized user. Here’s what you’ll generally need to provide:

  • Full legal name
  • Address
  • Date of birth
  • Social Security number (not required by all issuers)
  • S. citizenship status (not required by all issuers)
  • Relationship to cardholder (not required by all issuers)

Some issuers may ask you to provide additional information, so check upfront to see what’s needed.

4.   Submit The Request

How you submit the requested information will depend on the credit card company’s website. In any case, follow the prompts or provide as much information as you can in a secured message to them after logging in to your account online. If you’re calling, follow the automated instructions to see which option is available for you to add an authorized user. If you want to set a spending limit for your authorized user, do that now.

Once the request has been submitted, the card issuer will verify the authorized user’s identity. If the request is approved, the new user will receive a new card in the mail. The authorized user will then need to activate the card once it’s received.

Consider The Pros And Cons Of Adding An Authorized User

Adding an authorized user on your credit card is not a decision to be taken lightly. Before making a decision, you’ll want to consider the benefits and drawbacks of this choice.

Pros

  • Helps to build credit: An authorized user can build their credit history, since the credit activity on the card will be reported to the credit bureaus. It may even accelerate how fast you can raise your credit score.
  • Increases chances of earning credit card rewards: If you have more than one user making purchases on the same card, you’re more likely to earn more points, and therefore more rewards.
  • Easily share an account with family members: If you want to teach your child about credit, having them as an authorized user is a great learning experience.

Cons

  • Your credit may be damaged: If the authorized user isn’t as trustworthy or as responsible, you could find your account being mismanaged, compromising your credit.
  • You may be charged an extra fee: Some credit card issuers charge an additional fee to add additional users.
  • You’re solely responsible for payments: If the authorized user makes purchases and doesn’t pay, you’re stuck with the payments.

An Authorized User Is Not A Joint Cardholder

As mentioned above, joint cardholders need to apply for a card separately as both will be considered the primary cardholders — they’re both responsible for footing the credit card bill. Plus, after both of you submit the application, the credit card issuer will check both users’ credit history to make a decision for an approval.

An authorized user will not need to go through a credit check, but they’re not considered a primary user, hence they’re not responsible for the payments. If you’re interested in getting a better interest rate or credit limit, you can consider getting a co-signer to help you out.

The Bottom Line: An Authorized User Can Help A Responsible Cardholder Build Credit

An authorized user is an additional user on a person’s credit card. This person, called the primary cardholder, is ultimately considered the owner of the account and is responsible for all payments. However, authorized users can use the credit card account much like the owner would.

If you’re someone who wants to be an authorized user, start by reaching out to someone you trust who you know is responsible with their credit. If you’re the primary cardholder and someone asks you to add their name on your card, think through the decision carefully. If anyone mismanages the account, both users are at risk.

No matter whether you’re the primary or authorized user, it’s important to understand how to manage your credit properly. That way, you’ll be able to benefit from a good credit score for years to come, such as accessing competitive interest rates and the best rewards credit cards.

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Sarah Li Cain

Sarah Li Cain is a freelance personal finance, credit and real estate writer who works with Fintech startups and Fortune 500 financial services companies to educate consumers through her writing. She’s also a candidate for the Accredited Financial Counselor designation and the host of Beyond The Dollar, where she and her guests have deep and honest conversations on how money affects our well-being.