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Authorized User vs. Cosigner

Dear Experian,

I am wondering about the difference in liability between a cosigner and an authorized user on a credit card. I understand that if I am a cosigner on my ex-wife's credit card, I am responsible for the debt if she defaults or declares bankruptcy. Is this also true if I am not a cosigner but an authorized user? Also, if I am an authorized user, can I have my name removed from the account?

- URY

Dear URY,

When you share a credit card account with someone else, you are usually known as a joint account holder rather than as a cosigner, but your obligation is the same as with any other kind of debt. If you are joint on the account and the other person defaults on the debt, you are responsible for repaying the entire amount.

Authorized Users Are Not Responsible for the Debt

Being an authorized user on a credit card is not the same as being joint on the account. An authorized user has permission to use the credit card, but is not responsible for making payments. So, if you are only an authorized user on your ex-wife's account, you are not responsible for the debt in any way, and you can have your name taken off the account. You can also request that the account be removed from your credit history.

Separating Accounts When Getting a Divorce

Marriage may complicate the issue of whether you are legally responsible for an account that was opened when you were married. You should carefully review the credit card contract to be certain it shows you are an authorized user and not a joint account holder.

Even if you did not physically sign for the account, it's possible that your ex-spouse listed you as a joint account holder if you were married at the time the account was opened.

Some states have community property laws that automatically make joint any accounts entered into during marriage. If so, the only way to be removed as a responsible party for the debt is to contact the credit card provider and negotiate with it to change the contract.

A Divorce Decree Doesn't Mean You Are No Longer Responsible

Some people mistakenly believe that a divorce decree is all they need to end their responsibility to an account. While a divorce decree may list who should make payments for each debt, it does not alter the contract with your lender.

As long as you remain on an account as a joint account holder or a cosigner, you are equally responsible for the debt, even if you are not the one who made the charges. Any missed payments on a joint account will continue to impact you both, so it's important to separate all your credit accounts as soon as possible.

Here are some steps you can take before you divorce:

  • Review your credit report thoroughly. It's easy to forget about an account you may no longer be using. Get copies of your credit reports and review them carefully to make sure you take care of every joint account listed. You can order your free annual credit report from each of the three credit reporting companies at AnnualCreditReport.com. You can also view your free Experian credit report at any time.
  • Contact your lenders to close any joint accounts. In some cases, you may be able to ask the company to simply remove one of your names from the account. If not, it's best to close the account so that there are no further charges.
  • Open an account in your name only. If all your credit card accounts are joint accounts, it's a good idea to open a new account and begin establishing credit in your name alone.

Thanks for asking.
Jennifer White, Consumer Education Specialist

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