Primary Account Holder: Overview and Examples

What Is a Primary Account Holder?

The term primary account holder refers to the main user of an account such as a credit card, bank account, or even a debt vehicle such as a loan. This is the person who is legally responsible for the debt and balance along with the maintenance of the account. This individual can also make changes on the account including issuing access and/or cards to other authorized users.

Key Takeaways

  • A primary account holder refers to the main user of an account such as a bank or credit card account.
  • Primary account holders are legally responsible for the account and can also name authorized users.
  • Primary account holder procedures and liabilities can differ across various types of accounts.
  • Joint account holders share responsibility for an account and are both considered primary account holders.

Understanding Primary Account Holders

The person who makes the initial application to open an account or to apply for credit is referred to as the primary account holder. The financial institution uses its financial profile in order to approve the account.

With most financial accounts, the primary account holder has the option to allow authorized users to have access to the account. These people are known as secondary account holders and, in the case of credit cards, authorized users are also called additional cardholders. With authorized users, the primary account holder is still fully liable for all charges on the account, including charges made by both the primary account holder and any additional users on the account.

Primary account holder procedures and liabilities can differ across various types of accounts. The two main accounts set up by an individual primary account holder include checking accounts and credit card accounts.

Types of Primary Account Holder Accounts

As noted above, primary account holders can be named in several different kinds of accounts. Here are two of the most popular accounts where primary account holders may be listed.

Checking Accounts

Checking accounts typically require less of a detailed background check for approval than a credit card account. These accounts, however, will request a variety of personal information from the primary account holder for approval including their full name, address, and Social Security number (SSN).

A primary account holder approved for a checking account receives a debit card and checks. A debit card is typically the primary way account holders make payments and access their funds. Primary account holders have the option to add an authorized user which provides an additional card for each user.

Credit Cards

The primary account holder is the person who applies for the credit card. As such, the issuer considers the primary account holder's credit score when deciding whether to extend credit. The primary account holder may request that the credit card company issue additional cards to authorized users.

In some cases, the issuer may not pursue authorized users for any unpaid balances. The primary account holder also has the authority to discuss account details with the credit card issuer, dispute transactions, request a credit limit increase, redeem cashback or reward points, and close the account.

Primary Account Holder vs. Secondary Account Holder

Authorized users are called secondary account holders. These people may have access to certain parts or all of an account as outlined by the primary account holder such as signing authority. This is especially true for business accounts where a secondary holder may be able to make deposits at the bank but may not be able to withdraw money from the account.

In most cases, the secondary account holder has no legal responsibility for the account. This means the institution cannot go after this person in the event of any fraud or problems. This means the primary must assume the liability over everything the authorized user does including the balance. So the account owner must assume responsibility for any withdrawals a secondary makes if they are authorized to do so.

A primary account holder assumes responsibility for anything an authorized user does on an account.

Primary Account Holders vs. Joint Account Holders

Some financial institutions offer joint accounts to their consumers. These accounts allow two individuals to be considered primary account holders. Joint accounts are often common for married couples or family members such as a parent and a child. In a joint account, each account holder can be held responsible for the charges made on the account and not just for the portion they personally charged to the account with their name on it.

Either individual can also add authorized users to the account. Both joint account holders share the responsibility for all charges made by each other and any authorized users.