Credit Cards » Credit Card Guides » Is Being an Authorized User Right for You? Weighing the Pros and Cons
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Is Being an Authorized User Right for You? Weighing the Pros and Cons

Usually, being an authorized user provides a great way to build credit and get rewards. But, there are cases you may want to avoid it.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

What Is An Authorized User?

An authorized user is someone who has been given permission by the primary account holder to use a credit card or other financial account. As an authorized user, the person can make purchases and use the account in the same way as the primary account holder.

When a primary account holder adds an authorized user to their account, the authorized user will typically receive a card with their name on it. The authorized user can then use the card to make purchases, and the charges will be billed to the primary account holder.

However, the authorized user is not responsible for paying the bill, as that remains the responsibility of the primary account holder.

Pros And Cons Of Being An Authorized User

While there are several advantages to becoming an authorized user on someone else's credit card, there are also some potential drawbacks to consider:

Pros
Cons
Building Credit
Lack Of Control
Rewards
Your Score May Be Negatively Affected
Convenience
Relationship Strain
No Liability

If you're just starting out and have little to no credit history, becoming an authorized user on someone else's account can help you establish credit.

As long as the account is in good standing and the primary account holder is making on-time payments, the account's positive history will be reported on your credit report, which can help you build a positive credit history.

If the primary account holder has a credit card that offers rewards points or cash back, becoming an authorized user can help you earn those rewards as well.

This can be a great way to earn rewards without having to open a new account or apply for a new credit card.

If you share expenses with someone, such as a roommate or significant other, becoming an authorized user on each other's accounts can make it easier to split expenses and pay bills.

This can be especially helpful if one person is responsible for certain bills, such as utilities or rent, and need to pay these bills with a credit card.

As an authorized user, you don't have control over the account. This means that you may not be able to change the account's settings or monitor the account as closely as you would if it were your own.

If the primary account holder misses a payment or goes into debt on the account, it can damage your credit score as an authorized user. 

This is because the account's negative history will be reported on your credit report as well.

Becoming an authorized user on someone else's account can strain your relationship if there are disagreements or misunderstandings about the account.

It's important to communicate clearly and set expectations upfront to avoid any potential conflicts.

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How Being An Authorized User Affect Your Credit?

Being an authorized user can potentially have a positive or negative impact on your credit, depending on how the account is managed.

If the primary account holder has a good credit history and consistently makes on-time payments, becoming an authorized user on their account can help you establish or improve your credit history. This is because the account's positive history will be added to your credit report, which can help increase your credit score.

However, if the primary account holder has a poor credit history or frequently misses payments, becoming an authorized user on their account can have a negative impact on your credit. This is because the account's negative history will also be added to your credit report, which can lower your credit score.

It's important to note that not all credit scoring models consider authorized user accounts when calculating credit scores. In addition, some lenders may view authorized user accounts differently than accounts in your name, especially if you have a limited credit history. This means that becoming an authorized user may not always have the same impact on your credit as opening a new account in your own name.

When You May Want To Avoid Avoid It?

There are several situations in which you may want to avoid becoming an authorized user on someone else's credit card:

  • Lack of trust: If you don't fully trust the primary account holder to use the account responsibly, it may be best to avoid becoming an authorized user. This is especially true if the primary account holder has a history of overspending or missing payments.
  • Existing credit issues: If you already have credit issues, such as a low credit score or a high level of debt, becoming an authorized user on someone else's account may not be helpful. You may want to address your own credit issues first before considering becoming an authorized user on someone else's account.

  • Relationship strain: If becoming an authorized user on someone else's account will strain your relationship with that person, it may be best to avoid it. It's essential to prioritize your relationships and avoid potential conflicts or misunderstandings.

  • Unfavorable terms: If the terms of becoming an authorized user, such as the fees or interest rates associated with the account, are unfavorable, it may not be worth becoming an authorized user. 

  • Fees: part of the credit cards (especially the premium cards) require a fee. 
Card
Annual Fee
Authorized User Annual Fee

$550
$75

amex platinum

$695
$175 for up to 3 additional Platinum cards, then $175 per additional Platinum card (see rates & fees)

Venture X Rewards

$395
Free for the first 5 people

Delta SkyMiles® Reserve American Express Card

$650
$175 for each additional Delta Reserve Card (see rates & fees)

united infinite card

$525
Free

amex brilliant

$650

Citi AAdvantage® Executive World Elite Mastercard®

$525
Free for up to the first 10 users

How To Initiate The Process Of Being Added?

If you would like to initiate the process of being added as an authorized user, you should talk to the primary account holder. Then, he can do it by taking the the following steps:

  1. Contact credit card issuer or financial institution: it's possible to add an authorized user by phone, online, or through the mobile app. The primary cardholders should check it with your credit card issuer or financial institution to see what options are available.

  2. Provide the authorized user's information: As an authorized user, you'll need to provide your full name, date of birth, Social Security number, and contact information.

  3. Agree to the terms: The primary cardholders need to agree to the terms of adding an authorized user, which may include paying an additional fee or agreeing to take responsibility for any charges made by the authorized user.

  4. Receive and activate the authorized user's card: Once you've been added as an authorized user, the credit card issuer or financial institution will usually send a card with your name on it. You will need to activate the card before using it.

  5. Set spending limits and alerts (optional): as an authorized user, you may want to set spending limits or alerts (it can be done also by the primary cardholders). This can help you monitor the account and prevent overspending or fraudulent activity.

It's important to communicate clearly about the terms of the arrangement and to use the account responsibly to avoid any negative consequences.

How To Remove Yourself As An Authorized User On?

To remove yourself as an authorized user on a credit card, follow these steps:

  1. Contact the credit card issuer: You can usually remove yourself as an authorized user by calling the credit card issuer's customer service line.

  2. Provide your information: You'll need to provide your name, Social Security number, and any other information the credit card issuer requests to verify your identity.

  3. Request to be removed: Let the customer service representative know that you would like to be removed as an authorized user on the account.

  4. Confirm removal: Make sure to confirm with the customer service representative that you have been removed from the account.

  5. Monitor your credit report: After being removed as an authorized user, it's a good idea to monitor your credit report to ensure that the account is no longer listed and that there are no errors or inaccuracies.

It's important to note that removing yourself as an authorized user may not automatically remove the account's history from your credit report.

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The product offers that appear on this site are from companies from which this website receives compensation.
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The product offers that appear on this site are from companies from which this website receives compensation.
Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
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Rewards Plan:
1X – 5X 5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

amex brilliant

Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
Welcome Bonus:
95,000 points 95,000 Marriott Bonvoy bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership

Amex Delta SkyMiles Platinum card

Rewards Plan:
1X – 3X 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets and 1X Miles on all other eligible purchases
Welcome Bonus:
50,000 miles 50,000 bonus miles after you spend $3,000 in your first six months
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
Top Offers From Our Partners

amex platinum

Rewards Plan:
1X – 5X 5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

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Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
Welcome Bonus:
95,000 points 95,000 Marriott Bonvoy bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership

Amex Delta SkyMiles Platinum card

Rewards Plan:
Up to 3x miles 3 miles per $1 spent on United purchases immediately after earning your $125 annual United purchase credit, 2 miles on all other travel and select streaming services, 1 mile on all other purchases
Welcome Bonus:
60,000 miles 60,000 bonus miles + 500 Premier qualifying points (PQP) after you spend $4,000 on purchases in the first 3 months your account is open.
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

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