If you're looking to build credit, becoming an authorized user on someone else's credit card is a smart option. It can be relatively low-risk and allows you to build or boost your credit score. But before you sign up there are some things you should know. Show
Below, CNBC Select reviews common questions about what's involved in being an authorized user on a credit card. What is an authorized user?An authorized user is an additional cardholder on someone else's credit card account. You have a credit card in your name that is linked to the primary cardholder's account. How can being an authorized user affect your credit?When you're added as an authorized user to someone else's credit card account, you can piggyback off their credit. With that in mind, you should really only become an authorized user on an account owned by someone with good (670-799) or excellent credit (800-850). Most major card issuers report authorized user data to the three main credit bureaus — Experian, Equifax and TransUnion — but you can call your issuer to confirm. What responsibilities does an authorized user have?An authorized user has no liability whatsoever. Authorized users can make charges, but they aren't responsible for bill payments. The primary cardholder has complete liability and is responsible for making payments, redeeming rewards, requesting credit limit increases, etc. That said, it's essential for authorized users to show good financial habits when using someone else's card. You should not spend beyond your means, and you should make a clear plan with the cardholder to pay off your balance on time and in full each month. You also don't have to actually use the card to see your credit score rise as the result of being an authorized user. So if the cardholder doesn't feel comfortable trusting you with your own card, you'll still benefit from being linked to their account. How do I add/become an authorized user on a credit card?The primary cardholder has to add you as an authorized user. You can either do it online, via your bank's mobile app or over the phone. The process can be completed within a few minutes, and your card will likely be mailed to the primary cardholder's address. Sometimes there's the option to ship the card to an alternative address. And if you already added someone as an authorized user on one card from an issuer, the process is often quicker to add them to an additional card from the same issuer. For example, if you already added your spouse to your Blue Cash Preferred® Card from American Express, then you would just have to select their name to add them to your American Express® Gold Card instead of reentering the information. Terms apply. How much does it cost to be an authorized user?How do I remove/get removed as an authorized user on a credit card?Depending on the card issuer, the authorized user may be able to call and asked to be removed from the card. In other cases, the primary cardholder will have to call the bank themselves to ask for the removal of any authorized users they no longer want to have access to the card. What's the next step after being an authorized user?Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.  What Is an Authorized User on a Credit Card?An authorized user on a credit card is a person who is added to a credit card account by the primary cardholder Authorized users can get their own credit card with their name on it, and they have access to the primary cardholder’s credit line, but authorized users are not responsible for making payments. That’s one big reason why credit card companies don’t need to check an authorized user’s credit report when they’re added to an account – the authorized user doesn’t share any of the risk. It’s common for parents, employers and couples to add authorized users to their credit card accounts, in order to give the authorized users the ability to make purchases without assuming payment liability or having to qualify for their own cards. This unique type of financial relationship has pros and cons as well as important implications for both parties’ credit standing. How Being an Authorized User Affects Your Credit ScoreOnce an authorized user is added to a credit card account, the issuer will begin relaying account information to the major credit bureaus on a monthly basis under the authorized user’s name. As long as the account is managed well, the authorized user’s credit report should reflect positive information, whereas account mismanagement (e.g., missing payments or exceeding the credit limit) produces the opposite effect. If the authorized user has no previous credit history, his or her first credit score should be generated within six months. This score could range anywhere from bad to perhaps even excellent, depending on how the account is managed in the meantime. If it’s not the authorized user’s first credit account, the credit score ramifications are likely to reveal themselves as soon as the account appears on his or her credit report. The initial impact is likely to be negative, as is temporarily the case whenever a person opens a new credit account, but that will reverse itself with time and responsible use. You can get a forecast specific to your situation by trying WalletHub’s free credit score simulator. Authorized User Pros & ConsThe decision to add an authorized user to your credit card necessitates carefully weighing the risks and rewards, as there are certainly a few of each. Authorized User Pros:
Authorized User Cons:
Who Can Be an Authorized User?You can make anyone an authorized user on a credit-card account and with little hassle. All you need is the person’s name, date of birth and, in some cases, their Social Security number. There are no restrictions regarding the authorized user’s age. But just because you can add someone as an authorized user doesn’t mean you should. As the primary account holder, it is your credit score, reputation and money on the line. It’s therefore extremely important that you fully trust someone before making him or her an authorized user. “Ask yourself if it’s a good idea to get involved in a financial relationship with this person,” said Lisa Bolton, a marketing professor at Pennsylvania State University who focuses on consumer insights. “The more established of a relationship and the more trust between the people, the better off it’s going to be.” That’s why some of the most common authorized user relationships include:
“There’s some abuse of [authorized use], as well, where actually there is almost no real relationship and people are being put on cards to help people’s credit history,” Bolton said. “That’s not the purpose of it, and that shouldn’t be done because it’s becoming a big problem for credit card companies, and it’s going to put at risk this opportunity for people who are using it for legitimate purposes.” Adding & Removing Authorized UsersMost credit-card issuers will allow you to add an authorized user over the phone, through a paper application form or online — with the last option being the simplest. After you add an authorized user to an account, the new account should appear on his or her credit report by the end of the next billing cycle. So it could show up in just a few days or take about a month, depending on when in the card’s billing cycle the authorized user is added. The primary account holder’s credit report will not reflect the authorized user’s addition. Removing an authorized user’s account access is just as easy. All you have to do is call and ask the bank to take the person’s name off of your account. This will revoke their access and deactivate their card. 5 Tips For Awesome Authorized UseAn authorized-user arrangement is not without risks, so it’s important to carefully consider the following tips before dipping your toes in the authorized-user pond:
All in all, adding an authorized user – or becoming one – can be a good idea with great potential results. As long as you avoid the pitfalls, maximize the benefits, and set the right ground rules, whomever you add as an authorized user will enjoy a head-start in their credit building journey.
Authorized Users on Credit Cards FAQ(15 questions)Chip
Lupo, Credit Card Writer An authorized user on a credit card is a person who can charge purchases to the account but is not responsible for making payments. Anyone can become an authorized user on someone else's credit card, though most authorized users are family members or employees of a business. To add an authorized user, the
primary cardholder will need to log in to their online account or contact the credit card issuer and request that the individual be added to their account. The primary cardholder will need to provide the person's name, birthdate, and address, in most cases. Some issuers may also require an individual's Social Security number to add them as an authorized user. Key Things to Know About Authorized Users on a Credit Card Credit card issuers all have their own
rules for authorized users. Some issuers may have minimum age requirements for authorized users or a maximum number of authorized users you can add to your account. Authorized users don't have the same account privileges as the primary cardholder. Generally, authorized users may earn rewards, make payments, and report lost or stolen cards.
They cannot redeem rewards (unless the primary cardholder allows it), request credit limit increases, or close the account. An authorized user can usually build credit, if the account is in good standing. Issuers report account activity to the major credit bureaus every month, and many issuers also report this information for authorized users. Some issuers won't report authorized users to the credit bureaus until they're at least 18 years old, or if the primary
cardholder's account is delinquent, for example. The primary cardholder is financially liable for all charges on the account. Authorized users are not responsible for making payments. That obligation belongs to the primary cardholder. Authorized users can remove themselves from the account at any time. An authorized user can request removal from the account online or by contacting the issuer's customer service department. The primary
accountholder can also remove authorized users. An authorized user cannot remove other authorized users from the account. Chip Lupo, Credit Card Writer Yes, you should add an authorized user to your credit card if you want to help a family member or close friend build or rebuild their credit. Adding an authorized user could also increase your rewards earnings and help you qualify for an initial bonus faster. What to Know Before Adding an Authorized User to Your Credit Card
The decision to add an authorized user should not be taken lightly. Whether it's for building credit or earning rewards, it's important that the primary cardholder trust whomever they add as an authorized user. How many authorized users can be on a credit card?Chip Lupo, Credit Card Writer Four or more authorized users can be on a credit card, depending on the issuer and the specific card. Some credit card companies limit how many users you're allowed to add, whereas others have no restrictions on the number of authorized users that can be on a credit card account. Maximum Number of Authorized Users Allowed by Major Credit Card Issuers Certain credit cards, such as business credit cards and co-branded travel cards, may have different limits, so be sure to contact customer service or refer to your cardmember agreement before adding any authorized users. It's also important to understand that the primary cardholder, not the authorized user, is responsible for all charges on the account regardless of who made them. Any mistakes on the account, such as late payments or maxing out the credit limit, may negatively affect both people's credit scores, though. The primary cardholder or the authorized user can log into their online account or mobile app, or call the issuer's customer service department, at any time to remove the authorized user from the account. How do I add American Express Platinum authorized users?Chip Lupo, Credit Card Writer To add an American Express Platinum card authorized user, log in to your online account and click the “Account Services” tab, or call customer service at 1 (800) 528-4800. You will need to provide the person's full name, Social Security Number, and date of birth to add them as an authorized user. A primary cardholder can make anyone an American Express Platinum card authorized user, as long as they are at least 13 years old. How to Add an American Express Platinum card Authorized User Online
When you add an American Express Platinum card authorized user, they will receive their own card, sent to your mailing address, within 14 days of being added to the account. The authorized user's card will be linked to your account and will have full access to the account's credit limit. American Express authorized users are able to make purchases, earn rewards, use the Amex app, and make payments. However, they cannot redeem rewards or set their spending limit. In addition, any purchases an authorized user makes on the account will appear on your statement, and as the primary cardholder, you are responsible for all purchases on the account. American Express reports account information to all three of the major credit bureaus, which affects not only the user's credit history, but also the primary cardholder's. Authorized users may be removed from an account at the user's or primary cardholder's request at any time, and for any reason. What's the difference between a joint credit card and an authorized user?Chip Lupo, Credit Card Writer The primary difference between a joint credit card and an authorized user on a credit card is who is responsible for making payments on the account. With a joint credit card, both accountholders are equally on the hook for paying the bill, whereas an authorized user has no legal obligation to pay. There are other minor differences between the two that could affect which approach you decide to take, though. Joint Credit Cards vs. Authorized Users
Currently, both joint cardholders and authorized users must be added to the primary cardholder's account. Primary cardholders may also add more than one authorized user, depending on the issuer and the card. In addition, authorized users cannot make changes to the account, like increasing the credit limit or adding more authorized users, but joint credit card owners have equal access to all the account's functions and features. Can I add an authorized user to my credit card without SSN?Some credit card companies let you add an authorized user without providing that individual's Social Security Number (SSN). You only need their name, birthday and address in some cases. But requirements vary by credit card company, and not all of them will allow you to add an authorized user with no SSN. To give you a better sense of what is required to add an authorized user, we looked into some of the most popular issuers' policies. Popular issuers' authorized user requirements:
Before adding an authorized user, you should also make sure to weigh the benefits and potential drawbacks of doing so. On the one hand, it will help the authorized user build credit. And if you mess up, the authorized user can have the negative records removed from his or her credit report. On the other hand, you're the one who's responsible for paying the bill every month. You can find more information about adding an authorized user on the WalletHub's authorized user guide. How can I add a Wells Fargo credit card authorized user?Maria Adams, Credit Cards Moderator You can add a Wells Fargo credit card authorized user through your online account. Here's how to add a Wells Fargo credit card authorized user:
Keep in mind that Wells Fargo authorized users aren't legally responsible for any charges made on the account. That's important to remember because when you add someone as an authorized user to your Wells Fargo card, you're authorizing them to make charges on the account. How can I add an authorized user to my Visa credit card?The primary owner of a Visa credit card account can add an authorized user by calling the card issuer's customer service number or logging into their online account. Adding an authorized user to a Visa card usually requires the authorized user's name, date of birth, address and Social Security number. Some issuers allow you to customize the authorized user's credit limit, so you might be asked about that during the set-up process as well. In general, it is free to add authorized users – especially to credit cards that don't charge annual fees. In certain cases, though, adding an authorized user does come with additional yearly costs, such as when an authorized user gets valuable benefits like airport lounge access. That said, the extra costs are usually less than the primary cardholder's annual fee. Call your card's customer service number or check the card's terms and conditions if you're curious about extra charges for authorized users. How can I get a credit card with no credit and no income?John S Kiernan, Managing Editor The only way to get a credit card with no credit and no income is to have a cosigner who can supplement your application with their own credit and income. While there are plenty of credit cards for people with no credit, all credit cards require applicants to have an income to prove they can make payments. A cosigner promises to pay back the credit card balance if you cannot, so their credit and income matter much more on the application. Unfortunately, there aren't any major issuers that allow cosigners, but you might be able to find local banks and credit unions that do. In addition, it's worth noting that “income” doesn't have to be from a salary. If you get money from things like retirement benefits, child support or investments, for example, those count as income. Your assets can be considered on the application, too. Authorized Users With No Credit and No Income One way to get access to a credit card without actually owning the account is to become an authorized user on someone else's credit card. You can do this even if you have no credit and no income. The account won't be in your name, but you can get your own physical card to use for purchases. The primary cardholder may have the ability to limit how much you spend, though. As an authorized user, you will build credit every month, as long as the account gets used responsibly. The primary cardholder must make all payments on the account. Being an authorized user on a responsibly-managed card can help you eventually qualify for your own credit card once you have an income.
How do I add an American Express authorized user?Chip Lupo, Credit Card Writer You can add an American Express authorized user online or by phone, at 1 (800) 528-4800. With either method of adding an Amex authorized user, you will need to provide some basic information about the authorized user, including their name, birthdate and Social Security number. Adding a user online is probably the easier method, though. How to Add an American Express Authorized User Online
Whether you add an Amex authorized user online or by phone, you should note that you're not required to give the date of birth and Social Security number right away if you don't have it. But you will have to provide that info to Amex within 60 days, or the authorized user's card will be canceled. The user must also be at least 13 years old to be eligible. How Amex Authorized User Cards Work Any American Express authorized user you add will get their own card, which will share a credit line with your card. However, you can use your online account to manage how much the user can spend – by setting their spending cap as low as $200. As the primary cardholder, keep in mind that you are responsible for paying off any purchases made by authorized users on your American Express credit card account. The account activity will also impact both your credit standing and the credit standing of any authorized users. By default, American Express will send the authorized user's credit card to you by mail, and you can choose whether or not to give the physical card to that person. But you can also request to have the card mailed to the user's address, as long as you make your request by phone rather than online. You can remove an Amex authorized user at any time. They can also request to be removed at any time. American Express Authorized User Fees On most American Express cards, there is no fee to add an authorized user. But some of the more expensive cards will charge authorized user fees that are a fraction of the card's regular annual fee. For example, you can add up to three authorized users on the American Express Platinum card for a total of $175 per year, then any users after that cost $175 each per year. Was this article helpful? Does adding someone to your credit line help their credit?When you add an authorized user to your credit card account, information from the account — like the credit limit, payment history and card balance — can show up on that person's credit reports. That means their credit can improve as a result of being added to a credit account you keep in good standing.
Can someone add me to their credit line?Becoming an authorized user on someone else's account simply means that the credit card issuer has been contacted by the primary cardholder or account owner asking that you be added to their account. You usually receive a card with your name on it.
Does being an authorized user on a credit card affect your score?Being an Authorized User Might Not Impact Your Credit
If a card issuer doesn't report authorized user activity to the credit bureaus, being added to the account won't impact your credit in any way. Thankfully, many card issuers do report authorized user activity to the major credit bureaus.
|
How to add someone to your credit line
Related Posts
Copyright © 2024 pauex Inc.
