No one is born with perfect credit. It takes time to build a substantial credit history and even longer to achieve a credit score high enough to qualify for top-of-the-line cash-back and travel credit cards.
If you’re impatient to learn what life is like for high-rolling cardholders, consider a shortcut: convincing a friend or family member with excellent credit to add you as an authorized user to a new or existing card account.
But before you rush to convince a creditworthy friend or relative to add you to their account, take stock of the rights and responsibilities that come with authorized user status — and the potential downsides.
What Is Authorized User Status?
The rules vary by card and account type, but virtually all credit card issuers allow primary cardholders to add authorized users. In most cases, there’s no charge associated with authorized user status, although some high-end cards — mostly those with hefty annual fees for the primary user — do levy annual surcharges for each additional user.
Authorized user status allows you to accompany the primary cardholder on their credit journey, but it’s not exactly a free ride. For starters, you need to spend responsibly or jeopardize your status, which the primary cardholder can revoke at any time.
More importantly, you need to remember you’re not entirely in control of your fate. If all goes well, your authorized user account will build your credit history (or help rebuild it after bankruptcy) and could improve your credit score over time. If the primary user falls behind on their payments, however, expect something closer to the opposite.
Authorized user status has other notable benefits for primary cardholders and authorized users alike, including keeping little-used card accounts active and building credit for teens and young adults. But it also has notable risks.
Pros of Authorized User Status
With responsible use and timely payments, authorized user status help you build or rebuild credit and can improve your credit score over time. Designating an authorized user can be a boon for primary cardholders by increasing reward earnings and lowering credit utilization.
- Builds the Authorized User’s Credit. The most compelling case for authorized user status is its credit-building power for people without a history of credit, such as students and young adults. Provided the issuer reports the authorized user account to the consumer credit reporting bureaus, it helps build up the user’s credit — an essential prerequisite for future loan applications.
- Could Improve the Authorized User’s Credit Score. Over time, a pattern of timely repayments and responsible use (in other words, low credit utilization) can work to raise the authorized user’s existing credit score. Although the improvement is unlikely to be quick or dramatic, anything helps when you’re repairing damaged credit.
- Keeps Seldom-Used Accounts Active. By adding an authorized user to a seldom-used credit card account, the primary cardholder ensures the account remains active. Each older, still-active credit card account helps keep the primary’s overall credit utilization rate low and raises their average account age. Both factors work to raise credit scores over time in the absence of negative factors like delinquencies.
- Increases Reward Earnings. Two spenders are better than one — when it comes to racking up credit card rewards, at least.
Cons of Authorized User Status
Authorized user status is a potential credit risk for authorized users and primary cardholders alike. A breakdown in communication between users could have consequences for their personal relationship as well.
- Potential Risks to the Authorized User’s Credit. Although the primary cardholder is ultimately responsible for making timely card payments and keeping credit utilization in check, any lapses could negatively impact the authorized user’s credit if the account displays as delinquent on the authorized user’s credit report.
- Could Negatively Affect the Personal Relationship Between the Primary and Authorized User. Should the authorized user rack up more charges than the cardholders can repay on time, acrimony is all but assured. If you’re not certain you can live up to your obligations as an authorized user, think carefully before jeopardizing a close relationship.
- Higher Risk of Lost or Stolen Cards. A credit card is more likely to go missing or fall into the wrong hands when it has a copy. If your authorized user card has the same number and security code as the primary card, the primary cardholder will need to cancel and reissue the card in the event of a loss.
Your Rights & Responsibilities as an Authorized User
As an authorized user, your rights and responsibilities differ from the primary account holder’s. Your role is subordinate and you lack full control over the account, so it’s a stretch to call an authorized user account “yours.” But you’re still expected to keep up your end of the bargain.
What You Can (& Should) Do as an Authorized User
As an authorized user, you’re obligated to keep your card secure and use it responsibly. Here is what you can — and should — do:
- Earn Rewards on Card Spending. Authorized user spending earns rewards at the same rate as the primary cardholder’s spending. It doesn’t hurt to ask your primary if they’re willing to share the spoils with you — if you don’t already live together, that is.
- Enjoy Certain Card Benefits. Authorized user cards generally carry the same benefits and privileges as primary cards. For instance, the Chase Sapphire Reserve Card’s airport lounge access benefit — one of the card’s top selling points — applies to the primary card and all authorized user cards. The exceptions to this rule are benefits awarded on a per-account basis only, as is the case with travel credits such as The Platinum Card from American Express’s $200 annual airline fee credit.
- Keep Your Physical Card and Card Number Secure. Using the card is a responsibility, not a right. Treat your authorized user card and its number with the same care as you would a credit card in your own name. If you misplace an authorized user card with the same number as the primary card, the primary will need to lock the entire account and reissue the card — a major inconvenience, especially if you or they are on the road.
- Avoid Overspending. Although you’re not personally responsible for the charges you make as an authorized user, overspending could strain the primary’s ability to make timely repayments. That, in turn, could negatively affect your credit down the line.
What You Can’t Do as an Authorized User
As an authorized user, you’re forbidden from making changes to the primary cardholder’s account information or payment methods. Although you have the ability to make charges on the account (unless the primary revokes this), you’re not technically responsible for them — the primary is.
Here is what you can’t do as an authorized user:
- Change the Primary Cardholder’s Information. As an authorized user, you’re unlikely to be granted your own account management login, which means you can’t change any account-related information without the primary cardholder’s credentials. If the primary account holder trusts you, they could always give you the password — although for obvious reasons that’s not recommended.
- Close the Account. You’re not authorized to close the entire card account.
- Redeem Rewards. You can earn rewards on the account, but you can’t redeem them. That’s the primary’s benefit, although they should be happy to spread the wealth.
- Directly Pay Card Balances. Without your own login for the card account, you can’t directly pay card balances. However, nothing stops you from compensating the primary cardholder for your charges.
- Take Responsibility for Card Balances. As an authorized user, you’re explicitly not responsible for card balances. If the primary cardholder always pays the bill on time, this is a good thing — you get the benefits of responsible credit use without being personally liable.
- Disclaim the Primary Cardholder’s Account Activity. On the other hand, you can’t disclaim the primary cardholder’s account activity. Your fates are joined. If they go on a spending spree that they can’t afford, your credit could suffer.
What You Might Want to Do as an Authorized User
Although authorized user status obligates you to none of the following moves, some or all could benefit you.
- Ask the Issuer to Report Your Authorized User Account to Credit Bureaus. Most credit card issuers report authorized user accounts to consumer credit bureaus, but it doesn’t hurt to confirm with your issuer. Without such reporting, your authorized user account is useless for credit-building purposes.
- Help the Primary Make Timely Payments. Although the primary cardholder is solely responsible for all card balances, nothing stops you from helping them out if they can’t make a payment on time. Faced with a choice between credit-damaging delinquency or a temporary hit to your bottom line, you should choose the latter.
- Set Usage and Spending Limits. Consider working out informal usage and spending limits with your primary cardholder with the aim of keeping the account’s credit utilization below 40% or so. Higher credit utilization could be detrimental to your credit score (and the primary’s).
- Apply for an Entry-Level Credit Card. Leverage your authorized user account’s credit boost to apply for a credit card of your own — probably an entry-level card like the Petal Cash Back Visa Card or a low-limit secured credit card. You don’t want to be an authorized user forever, after all.
In the early stages of your credit-building journey, one of the best moves you can make is to snag a supporting role as a credit card authorized user on a friend or family member’s account.
As long as the primary cardholder makes timely payments and you’re able to keep your own spending in check, your status as an authorized user will build your personal credit history and could increase your credit score over time.
Just be mindful of the risks — and remember that credit is a privilege, not a right.