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Everything you need to know about authorized users

Feb 07, 2022 admin

Editor’s note: This is a recurring post, regularly updated with new information.

Adding an authorized user to your credit card account can be a great way to meet spending requirements, accrue more points and even help a novice build their credit history. While it can be highly beneficial, there are also risks associated with adding an authorized user (or even being one yourself).

It’s important to choose someone who is responsible and able to repay their debts, even if they’re not legally obligated to do so. That’s just the tip of the iceberg. Here is everything you need to know about authorized users.

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Adding your children as authorized users to your credit cards will help them build a credit history and will hopefully lead to better credit scores as they transition to adulthood. (Photo by Maskot/Getty Images)

In This Post

What is an authorized user?

An authorized user is a person who has been added to a primary credit cardholder’s account. An authorized user receives a credit card with their name on it, linked to the primary cardholder’s account. They’re able to use it to make purchases just like they would with their own cards.

Benefits of adding authorized users

Adding authorized users can be beneficial to both the primary cardholder and the authorized user. The primary cardholder can enlist an authorized user to help meet spending requirements. Meanwhile, the authorized user can establish a credit history and take advantage of various card benefits for authorized users. For example, the Citi® / AAdvantage® Executive World Elite Mastercard® extends Admirals Club lounge access to authorized users (not including partner lounges), while The Platinum Card® from American Express offers individual Global Entry fee credits (up to $100).

Additionally, having an authorized user on your Ultimate Rewards credit card allows you to transfer rewards freely. This is really great if you have a stash of Ultimate Rewards points you want to transfer to a family member’s MileagePlus account. Sharing United miles carries a fee of $7.50 per 500 miles, plus a $30 processing fee. But you can transfer Ultimate Rewards points directly into the United MileagePlus account of an authorized user without violating any rules or incurring hefty fees.

It’s important to note that Chase allows household members to transfer Ultimate Rewards points to each other. However, in order to transfer Ultimate Rewards directly into another loyalty account (e.g., United, Southwest, Hyatt), the other account must be held by an authorized user on your Chase credit card.

The downside of adding authorized users

The downside of adding authorized users is that it may become more difficult to track spending when two people are using the same card. Also, the primary cardholder is responsible for all charges to the account. So, if your authorized user goes on a spending spree and refuses to cover the charges, you’ll be on the hook.

Making someone an authorized user carries risk. Only add an authorized user you completely trust and be sure to communicate ahead of time about your expectations for repayment.

Who can be an authorized user?

Barring issuer-specific age restrictions, anyone can be an authorized user. American Express requires authorized users to be at least 13 years old and to have no defaulted accounts with the bank. Discover imposes a minimum age of 15, and U.S. Bank requires authorized users to be at least 16 years old.

Bank of America, Capital One, Chase, Citi and Wells Fargo do not impose age restrictions.

Can I remove an authorized user?

Removing an authorized user is as simple as calling your credit card issuer. Some banks, including Citi, even let you do it online. Once the user has been removed from the account, which is typically done in a matter of minutes, the credit card becomes inactive.

Get the most benefit for adding an authorized user

A great way to maximize the benefit of adding an authorized user is to use a credit card that provides incentives. For example, the Virgin Atlantic World Elite Mastercard® currently offers 30,000 Flying Club bonus miles after spending $1,000 or more in purchases within the first 90 days of account opening. Additionally, you can earn up to 15,000 Flying Club bonus miles every anniversary after qualifying purchases and up to 5,000 Flying Club bonus miles when you add additional cardholders to your account. A while back, targeted Amex Platinum cardholders were offered up to 20,000 points for adding authorized users.

The information for the Virgin Atlantic card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

If you have a credit card that offers a big spending incentive, adding an authorized user is a great way to help you meet that requirement. For example, spending on Southwest credit cards counts toward the coveted Companion Pass. Earning 125,000 points per year is a little easier when you have a big-spending (and responsible) authorized user to help you get there.

Another way to benefit from having an authorized user on your card is with the Amex Platinum Card. The card offers 5x on prepaid hotels and flights booked directly or with airline or on Amex Travel. It also carries a $175 fee to add an authorized user (see rates and fees). However, you can add up to five authorized users to the American Express® Gold Card for $0 (see rates and fees); then $35 for additional cards thereafter (see rates and fees). Not only do you save money on the annual fee, but also your authorized user gets access to valuable card benefits like 4x points at restaurants; 4x points on up to $25,000 in purchases at U.S. supermarkets per calendar year, then 1x points.

This is a great way for household members to get all the best benefits of two rewarding cards without paying extra. Two cards for the household for the price of one.

How do authorized users affect my credit — And their own?

Adding an authorized user does not have an impact on your credit unless the additional card racks up a large amount of spending and increases your credit utilization ratio. This can be avoided by paying off large balances before the statement closing date.

Meanwhile, authorized users can see a positive credit impact by having access to an additional credit line and lowering their credit utilization ratio. For those building a credit history, being an authorized user can be a huge boost.

When I was in high school, my sister added me as an authorized user on her Bank of America credit card. By the time my 18^th birthday rolled around, I had a two-year credit history and got approved for the Blue Cash Everyday® Card from American Express. It worked out well for me and because I didn’t use the card for crazy spending sprees, my sister’s credit wasn’t negatively impacted.

It takes responsible people on both sides to mitigate possible negative impacts of adding an authorized user.

Joint account or authorized user?

The difference between a joint account and an authorized user comes down to liability. Joint account holders share liability for charges, while authorized users do not. Primary cardholders can also limit the amount of credit an authorized user can utilize. Joint account holders together can access the full credit line.

Being a joint account holder may prevent you from qualifying for your own version of the same card in the future. For example, my mom was added as a joint account holder to my dad’s Chase Sapphire Preferred Card years ago. When she applied for her own card last year, she was denied because Chase viewed her as already having the card. If she had been an authorized user (as opposed to a joint account holder), she would have qualified for her own card.

There isn’t much of an upside to joint accounts, other than lessening the burden of liability on the primary cardholder. Ideally, you shouldn’t be adding anyone to your credit card (as an authorized user or joint account holder) unless you trust them to use it responsibly.

Bottom line

Adding an authorized user can be widely beneficial to both parties. However, it’s important to be aware of the risks. The last thing you want to do is sour a relationship because of one person’s financial irresponsibility. Only add an authorized user whom you completely trust to be responsible with your credit line and pay their share of the balance on time.

Featured photo by adriaticfoto/Shutterstock.com

For rates and fees of the Amex Platinum card, click here.
For rates and fees of the Amex Gold card, click here.

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