Citi is an advertising partner. Obtaining the best features and benefits on a credit card can be difficult if your credit is bad or nonexistent. Adding yourself as an authorized user on someone else’s credit card is a great way to get premium benefits and establish or build credit. Be aware that there is some risk involved in becoming an authorized user because you do not have control over the account. Your credit may suffer if the primary account holder stops making payments, has an excessive balance, or closes the account.
Examine the benefits and drawbacks of accepting someone else’s credit card offer before deciding if it’s the right choice for you.
Find the Best Credit Cards for 2024
There isn’t a single credit card that works best for every family, every transaction, or every budget. The best credit cards have been chosen by us in a way that will be most beneficial to the largest range of readers.
What Is an Authorized User on a Credit Card?
Anyone who has permission from the primary cardholder and the card issuer to access their credit account is known as an authorized user. Usually, authorized users receive a different credit card bearing their name. Furthermore, even though they are not legally obligated to pay back credit card debt, if the account they obtain access to has a history of timely payments, it may help their credit.
Because of this, adding someone as an authorized user is frequently advised as a wise first step toward establishing credit for those just starting out. It’s crucial to remember, though, that while authorized users’ credit scores are likely to rise with regular payment activity, their credit will suffer with missed or late payments on the account.
Joint Credit Card vs. Authorized User
Credit card accounts can be shared in two common ways: jointly and with authorized users. In both situations, several users can make purchases and establish credit history using the same credit card account. Who is ultimately accountable for the account’s debt is the primary distinction between the two.
In contrast to an authorized user who is not accountable for the account’s bills, both parties share payment responsibility for a joint account. There are smaller distinctions as well. For instance, most of the time, an authorized user can quickly delete themselves from an account. In the meantime, if one of the members wanted to withdraw, the joint account would typically need to be closed.
Do Authorized Users Build Credit?
Becoming an authorized user can help you build credit. The authorized user’s credit report contains the complete account history, including the maximum credit limit, balance as of the most recent statement, and payment history. Authorized users can benefit from this by improving the primary elements that affect their credit score:
- Payment history. The authorized user inherits the payment history of the account. A lengthy history of timely payments by the cardholder will also be reflected in the authorized user’s report.
- Credit utilization. The authorized user’s credit score may benefit if the primary account holder has a high limit but uses a small portion of the balance.
- Length of credit history. Adding an authorized user to a long-standing credit card will raise the average and maximum age of your credit accounts, which will improve your credit score.
For the Authorized User
The majority of credit card firms notify the three main credit bureaus in the United States of an authorized user’s credit activity. S. (Transunion, Experian and Equifax). When reported, good account behavior such as timely payments and minimal credit utilization will help an authorized user’s credit.
A rewards credit card can provide you with additional benefits if you become an authorized user. These may consist of TSA PreCheck credits, airport lounge access, and other benefits. The primary cardholder should carefully review the terms of their card agreement because authorized users are granted varying benefits by each issuer.
For the Primary Cardholder
An old credit card account can be kept active by adding an authorized user. If the authorized user makes prudent financial decisions, the primary cardholder may also see an improvement in their credit score.
How Many Authorized Users Can Be On a Credit Card
Certain banks impose restrictions on how many authorized users are permitted to have an account. You should only authorize people you trust because the primary cardholder is ultimately accountable for the authorized users’ purchases. If you plan to add more than a few, you can directly contact your bank to find out if there is a cap on the amount of individuals you can add as authorized users.
How To Add an Authorized User
Through their online account or by calling the number on the back of the card, the primary cardholder can add an authorized user. Remember that adding an authorized user may incur an annual fee on certain credit cards, so before proceeding, make sure you understand the terms of your card.
How To Remove an Authorized User From a Credit Card
To remove an authorized user, all that needs to be done is give the issuer a quick call. The name of the authorized user will be deleted from the account, and their card will be deactivated.
How To Remove Yourself as an Authorized User
Removing yourself as an authorized user can usually be done very easily by calling your credit provider and requesting that they do so. Depending on the bank this may be enough. You may have to ask the primary cardholder to call you if certain banks require that they be the ones to request these changes. You could use the credit report dispute procedure to get the account cancelled if, in the unlikely event that you are unable to remove yourself and the primary cardholder refuses to ask the card issuer to do so.
Does Being an Authorized User Build Credit?
Yes. Building credit history can be facilitated by being an authorized user. But keep in mind that both the primary and authorized users’ late or missed payments will be recorded on both credit reports, so it’s critical to maintain the integrity of your accounts.
How Long Does It Take for an Authorized User To Show Up on a Credit Report?
In the event that this information is reported, it usually appears on your credit report within 30 days. The authorized user might not show up at all, though, as some lenders do not report authorized users to credit bureaus. If a month goes by and the new authorization does not appear when you think it should on your credit report, get in touch with your credit provider and inquire as to whether they have received information about the new user.
Reasons To Be Cautious
The primary cardholder’s actions will have an effect on the credit of an authorized user. The primary cardholder is responsible for making all payments on time and for using only a portion of the credit available on all accounts. Although these elements can help an authorized user who is attempting to raise their credit score, they can also lower it. Both the primary cardholder and the authorized user will be impacted if the primary cardholder is in bad credit or fails to make a payment.
Overspending is a possibility because the primary cardholder’s account can be accessed by an authorized user. Ultimately, all charges made to both cards must be paid for by the primary cardholder. Failure to adhere to a spending plan by the authorized user may place undue financial strain on the account owner. To put it plainly: If issues emerge, adding an authorized user could put a strain on interpersonal relationships.
Is It Good To Be An Authorized User On a Credit Card?
There are advantages to adding a verified user to a credit card account. Both parties can increase credit scores with responsible spending habits. However, overspending is a simple error to make, particularly if it’s not detected right away, so the primary cardholder should regularly check account activity to avoid any errors. Although adding an authorized user to a credit card carries risk for both parties, doing so can be beneficial for friends or family who may be just starting out or experiencing financial difficulties. As usual, the best course of action is to weigh all of your options before choosing one.
Best Credit Cards For Families Of 2024
Possibly. The account and the authorized user’s credit report will be deleted when an authorized user is removed from an account. Therefore, the effect on their credit score is contingent upon the degree to which the deleted account affected the score. The situation alone determines whether the change is beneficial or detrimental.
How old does an authorized user have to be?
To lawfully possess a credit card, a person must be at least 18 years old. Certain banks permit the addition of younger children to an account as authorized users. To find out what actions are necessary to add a minor to an account, get in touch with your credit card issuer.
Who should you ask to add you as an authorized user?
It’s crucial that you only request an authorized usership from those you can trust. Family or close friends can be great places to start. Establish a payment schedule at all times and have a backup plan in case things don’t go as planned.
Is an authorized user responsible for credit card debt?
Credit card debt is not the obligation of authorized users, but a delinquent account may have a negative impact on your credit score.
Please rate this article. Email: Please enter a working email address. Comments: We would love to hear from you. Please enter your thoughts. Send feedback to the editorial team. Something went wrong. Thank you for your feedback! Invalid email address Please try again later. Find the Best Credit Card.
Next Up In Credit Cards
Clint Proctor is a lead editor for Forbes Advisor’s credit cards and travel rewards division. He has worked as a personal finance journalist for five years, contributing to prominent national publications such as Business Insider and MyFICO. Clint is passionate about assisting others in making cost-effective travel arrangements after using millions of credit card points and miles to do so. lorem Is it really your intention to put your decisions on hold? The Forbes Advisor editorial staff is impartial and independent. We receive compensation from the businesses that advertise on the Forbes Advisor website in order to support our reporting efforts and keep this content available to readers for free. This compensation comes from two main sources.
FAQ
Does having multiple authorized users affect credit score?
Adding authorized users to your account won’t affect their credit score if your credit card company doesn’t report them. On the other side, it can assist authorized users in beginning to establish credit if your credit card company does report them.
Is there a limit to how many authorized users on credit cards?
Depending on the issuer and the particular card, a credit card may have four or more authorized users. There are credit card companies that restrict the number of authorized users that can be added to an account, while other credit card companies do not place any limits on this number.
Do authorized users build credit?
Adding yourself as an authorized user on someone else’s credit card could help you develop credit or build credit. However, timely, late, or missed payments made by cardholders and authorized users will be recorded on the credit reports of both parties, so it’s critical that they agree.
How much will my credit score go up if I become an authorized user?
According to a 2018 Credit Sesame survey, those with poor credit who were added as authorized users saw increases in their FICO score of 6% in less than two months and a 3% increase in less than two months. The advantages of being an authorized user increase with decreasing initial credit score
Read More :
https://wallethub.com/answers/cc/how-many-authorized-users-can-be-on-a-credit-card-2140787508/
https://www.forbes.com/advisor/credit-cards/authorized-user-credit-card/