Credit Card Authorized User

What Is a Credit Card Authorized User?

A credit card authorized user is a person who has permission to use another person’s credit card but isn’t legally responsible for paying the bill. For personal cards, authorized users are usually family members, such as a child or a spouse. Depending on the credit card issuer, some credit card companies provide a unique card to authorized users linked to the holder of the primary account. Others simply authorize a credit card authorized user to make purchases with the primary account holder's card.

Authorized users typically report lost or stolen cards, receive account information such as credit limit, available balance, and fees, make payments and initiate billing disputes. Cards generally do not allow authorized users to close an account, add another authorized user, change the address or PIN or request a change to the credit limit or interest rate.

Understanding Credit Card Authorized User

A credit card authorized user is not liable for the payments that they charge to the credit card. Though the actual cardholder usually expects the authorized user to pay the costs of anything they purchase on the card, that is ultimately an agreement between the cardholder and the authorized user. For example, if one member of a couple is an authorized user on the other’s credit card and the couple splits up, the cardholder is legally responsible for covering any charges on the card if the authorized user refuses to make the payments.

Authorized users sometimes opt to simply pay the cardholder any money owed on the card, so that the cardholder can pay the balance, or the cardholder gives them access to the card’s account so that the authorized user can make the payments themselves. In some cases, such as when a child is an authorized user, the cardholder simply pays the entire balance on their own.

Effects on Credit

Many people become authorized users of other people’s credit cards as a way to build or rebuild credit. If a person has no credit, or if their credit score is particularly low, they can potentially raise their credit score by becoming an authorized user of a credit card that the cardholder uses responsibly. However, if the cardholder does not use the card responsibly and their credit score sinks, this can potentially drag down the credit score of the authorized user.

Similarly, an authorized user can drag down a cardholder’s credit score, depending on how they use the card. Say a cardholder and an authorized user have a personal agreement that the authorized user needs to pay the issuer directly for any charges made on the card. However, if the authorized user fails to make payments on time and the cardholder is either unaware of this or unable to step in and make the payments themselves in order to avoid a late payment, the cardholder’s credit suffers, due to a late payment on the primary cardholder’s credit history.

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