Everything You Need To Know About Credit Card Authorized Users

Credit card authorized users are individuals added to a primary cardholder account. They can make purchases and earn rewards but aren’t responsible for the balance or card management.

An authorized user arrangement can be beneficial for helping someone build their credit or simplify financial management within a family or business, but it comes with responsibilities and risks.

Read on to learn what it means to be an authorized user, how to add one, and the advantages and drawbacks of sharing your credit line.

What Is an Authorized User on a Credit Card?

An authorized user is someone you’ve added to your credit card account, usually a trusted family member or employee. Authorized users typically get access to make purchases and may get some benefits but aren’t involved in managing the account. You may expect an authorized user to pay for purchases they’ve made, but the credit card company will not hold them responsible for balances on your account. 

As the primary cardholder, you are responsible for and control the account. An authorized user can make purchases, access credit, and earn rewards but can’t make changes to the account.

You might want to add an authorized user to your account so they can make purchases you pay for or help them build credit with your account on their credit report. For example, it’s common for parents to add children as authorized users to pay for necessities such as gas or food. Employees can use authorized user status to make purchases for your business.

How To Add an Authorized User to Your Credit Card

You can add an authorized user to your card when you open it or to an existing account. If you’re applying for a new credit card, you typically have the option to add an authorized user to your application. You can log in to your online account or call the customer service line to add an authorized user to an established account.

You typically need the following details to add an authorized user to your account:

• Full name
• Date of birth
• Social Security number (sometimes)
• Billing address (usually)

What Can an Authorized User Do on a Credit Card?

An authorized user can access:

• A physical or virtual card (or both)
• The ability to make purchases and earn rewards, if applicable
• Limited benefits, such as purchase protection or price protection

Many authorized user programs don’t charge a fee, especially if the credit card doesn’t have a fee for the primary cardholder. However, with these cards, authorized user features are limited to card access, purchases, rewards earning, and limited benefits.

Some cards extend premium benefits to authorized users, typically for a fee. For example, it costs $195 to add an authorized user to The Platinum Card^® from American Express (rates & fees). It comes with airport lounge access, Fine Hotels + Resorts and The Hotel Collection privileges, and status with Hilton, Marriott, Avis, Hertz, and National (upon enrollment).

Similarly, the Chase Sapphire Reserve^® has a $75 authorized user fee, which offers a Priority Pass Select membership and travel insurance, including primary rental car coverage.

Pros and Cons of Adding an Authorized User to Your Card

Pros

Adding an authorized user can be especially helpful for managing family or business expenses. Spouses can add each other for simplified finances. Parents can add children as authorized users to deal with expenses and help build a credit history before they can apply for their own cards. Business owners can add trusted employees to keep track of business expenses and earn rewards.

Here are several positives of adding an authorized user:

• Credit Building: You can help an authorized user establish or improve their credit score since positive account activity is typically reported to credit bureaus.
• Rewards Earning: Authorized users can help you earn rewards faster by spending on your account.
• Convenience: By adding an authorized user, such as a child or employee, you can manage expenses without giving them full access to the account.
• Access to Benefits: Authorized users typically get access to protections such as zero liability for fraud, purchase protection, and extended warranty.

Cons

Adding an authorized user can be risky for both the primary cardholder and the authorized user, especially if there are no clear expectations for how to use the card.

Here are several negatives of adding an authorized user:

• Credit Risk: As a primary cardholder, an authorized user could damage your credit by charging more than you can afford to pay off. Authorized users are also at risk if the cardholder mismanages the account with late payments or high balances, which can bring down their credit score.
• Fees: Some issuers charge a fee for adding an authorized user, usually for premium cards that extend valuable benefits to authorized users.
• Limited Control: Authorized users don’t typically have account management control (though some issuers, like Capital One, allow this) or the ability to adjust the credit limit or close the account.
• Possible Tension: Authorized users and primary cardholders may face tension in their relationship if there are conflicts over payments or card usage.

Is Adding an Authorized User Worth It?

Adding an authorized user to your account has significant benefits, but you should weigh the responsibility carefully. Here’s a look at when it is and isn’t a good idea to add someone as an authorized user.

When an Authorized User Is a Good Idea

• You have a well-managed credit card with a good payment history and low credit utilization. 
• You can help a trusted family member, friend, or employee build or improve their credit and have a clear arrangement of how the card should be used.
• You want to manage expenses for family members or employees.
• You want to earn rewards or share benefits with a family member, such as a spouse, without needing separate accounts.

When an Authorized User Is a Bad Idea

• Your account has a history of financial instability, such as missed payments and high credit utilization, that could damage an authorized user’s credit score.
• You and the authorized user don’t clearly understand how the card should be used. For example, you haven’t set spending limits or expectations about whether you expect them to pay for their purchases.
• The authorized user struggles with overspending, which could leave you responsible for a larger credit card bill than expected.

Tips for Adding an Authorized User

Adding an authorized user can be beneficial, but you should take steps to set clear expectations and minimize risk on both sides. Discuss spending limit expectations with the authorized user. Then, check your account settings, as you can likely set limits for how much an authorized user can charge to your account. If you expect an authorized user to reimburse you for their purchases, have an upfront discussion about how and when they must make repayments. And finally, manage conflict with communication. Use a shared budget or tracking app to ensure you’re on the same page for card usage.

Final Thoughts

Adding an authorized user to your credit card can be a great way to build credit, earn rewards, and manage family or business expenses. But before you add an authorized user, you should weigh the benefits against the potential risks. Setting clear expectations, including spending limits and repayment expectations, can help avoid conflicts and ensure the arrangement benefits everyone involved.