DEFINITION of 'Additional Cardholder'

A secondary user added to a credit card account by the main or primary cardholder. The additional cardholder generally gets to enjoy all the benefits of the credit card, without being liable for making payments on the account, which remains the responsibility of the main cardholder. As a result, cardholders need to be very cautious about adding additional cardholders to their credit cards. While some issuers allow friends to be added as additional cardholders, other issuers restrict additional users to those individuals who are immediate family members, at least 18 year of age, and living at the same address as the primary cardholder.

Also known as authorized user.

BREAKING DOWN 'Additional Cardholder'

Since an additional cardholder is not considered as a separate borrower on the credit card account, the process of adding an extra user is relatively simple, and does not require a separate credit check. Additional cardholders are usually able to access the maximum credit limit available to the primary cardholder, although some issuers allow the main cardholder to set individual limits for each additional cardholder.

There are pros and cons to adding additional cardholders to one's credit card account. The benefits are that rewards offered by many cards' reward programs can add up because of the increased spending  by additional users. Spending by additional cardholders is consolidated into one account - the primary cardholder's account - but is clearly identified, making it easier to track spending and manage budgets, than if multiple cards were used.

However, there are a number of drawbacks. Adding an extra user may result in a higher annual card fee. As noted earlier, the primary cardholder is generally liable for all debt on the account, although some cards may enable liability to be shared between the main cardholder and additional cardholders. Additional users' card activity is not tracked separately by credit bureaus; this means that the primary cardholder's credit rating could be jeopardized if an irresponsible secondary user goes on a spending spree and is unable to pay the resultant credit card debt.

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