Credit Card Authorized User: What You Need to Know

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When you become an authorized user, you join another person's credit card account and can then use it to make purchases. Ideally, the account is added to your credit report and the primary cardholder's good credit management helps you improve your creditworthiness. You typically receive your own card from the issuer, but you are not legally responsible for making payments.

Becoming an authorized user on an account with a long history of on-time payments is one way to potentially improve credit—especially if your credit history is limited, damaged or nonexistent. If you're considering becoming an authorized user on someone's account, first make sure you understand the risks and expectations. Here are the basics.

What Is an Authorized User?

An authorized user is a person added to a credit card account by the primary cardholder. Anyone can be an authorized user, as long as they meet the card issuer's age requirements; for instance, the primary cardholder may choose to add their child, spouse, partner or close friend as an authorized user.

There may be a fee for adding an authorized user. Cards that charge an annual fee might also charge an authorized-user fee, which could be $75 or more.

While an authorized user can make purchases with their card (assuming the cardholder agrees), the liability for making payments lies only with the primary cardholder. The credit card issuer will expect the primary account owner to pay the monthly bill as normal, no matter who made the purchases.

What Responsibilities Does an Authorized User Have?

Officially, an authorized user is not expected to pay their portion of the monthly bill directly to the card issuer. But in order to build responsible credit habits—and avoid buying more than they can afford, leaving the account owner with the bill—it's typically a good idea for an authorized user to cover their charges.

To keep card balances under control, the authorized user should set up a payment arrangement with the primary cardholder. At the end of each month, for example, the authorized user could transfer an amount equivalent to their purchases to the account owner, or the account owner could send a request on Venmo or another payment app for the charges. Both parties should create accounts on the card issuer's website or mobile app so they can track their purchases.

How Does Being an Authorized User Affect Your Credit?

As an authorized user, the credit card account is reflected on your credit report, which can help you make progress toward building a robust credit history.

For example, say you're 18 and you've been added to a parent's credit card as an authorized user. A few times a month, you use the card to pay for gas, and you pay your parent for those charges. Meanwhile, your parent uses the card to make purchases of their own, like a new dishwasher and a Netflix subscription. Your parent pays off the full balance each month.

If the credit card company reports authorized user activity to the credit bureaus, all of the credit card's characteristics will be reflected on your credit report, including: its credit limit, the amount of credit being used (known as credit utilization) and payment history. If the card's been managed responsibly, meaning no missed payments or high levels of debt, an authorized user account has the potential to improve your credit scores.

On the flip side, if your parent misses payments or uses a big portion of their credit limit, your credit may not improve. The impact of negative information depends on how the credit bureau views that history. Experian, for example, won't include the information on an authorized user's credit report if the primary account owner misses payments, but high credit utilization—like a maxed-out credit card—could wind up damaging the authorized user's credit.

Plus, your own credit history will factor into how much your credit is affected by authorized-user status. If you're new to credit, being an authorized user could have a bigger positive impact than it would for someone who has an established credit history or damaged credit.

How to Add or Become an Authorized User on a Credit Card

To become an authorized user, ask a trusted family member or friend to add you to their account. Make sure you can rely on the account owner to pay their bill on time every month, and ideally that they pay their whole balance. The lower their utilization, the better; using more than 30% of an account's credit limit at one time can result in credit score damage.

Some cards let the primary cardholder set spending limits for authorized users. But even if that's not possible, you can informally agree to spend up to a certain amount each month and pay back the cardholder by a certain date.

How to Remove or Get Removed as an Authorized User on a Credit Card

The primary account owner can remove an authorized user at any time. It's often possible to do so online, but calling is your best bet if you're unable to find a way to do so on the issuer's website or mobile app. You may also be able to remove yourself by requesting the change directly with the credit card issuer.

Keep in mind that your credit may be affected after the removal. If it was a card with a long history and you don't have any other accounts of similar age, or you have little credit otherwise, you may see a drop in your credit score.

Managing Your Credit as an Authorized User

You can retrieve your free credit report from all three credit bureaus through AnnualCreditReport.com. You can also get your credit report for free directly through Experian, which also offers access to your free FICO® Score . It's always important to keep an eye on your credit, but it's especially urgent when you're eager to build or improve it as an authorized user. Regularly check your credit report and score so that you can determine if becoming an authorized user is helping your score grow.

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