Should I add an authorized user to my credit card?

Adult woman and daughter shopping online with credit card and laptop.Image: Adult woman and daughter shopping online with credit card and laptop.

In a Nutshell

Adding someone to your credit card as an authorized user can be a great way to help that person build (or rebuild) credit. But if you don’t go about it the right way, there can be negative results, too.
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An authorized user is someone you authorize to use your credit card and access other account features. But there could be some negative consequences for you.

Adding an authorized user to your credit card account is easy to do, and it can be a great way to help a friend or family member improve or establish credit. Plus it can even help you earn rewards.

When you add an authorized user to a credit card, you may be doing that person a huge favor, but you should know some key things before you take the leap.



How to add someone to your credit card as an authorized user

Depending on your credit card issuer, it may not cost anything to add an authorized user to your credit card account. But note that adding an authorized user could come with an additional annual fee. Simply contact your issuer to add the new user’s information. Typically, that involves verifying a few details, like the authorized user’s name, date of birth and Social Security number.

Your authorized user can have a separate credit card to use, but as the primary account holder it’s up to you to decide if you want to give that person that much access to the account.

Does adding an authorized user hurt your credit?

Adding an authorized user to your credit card account alone shouldn’t have a negative impact on your credit. But keep in mind that if that person uses your credit irresponsibly, negative credit impact could follow. Check out the section below on drawbacks for more information.

Benefits of adding an authorized user

Help someone get a fresh start

When you add an authorized user to your credit card account, information from the account — like the credit limit, payment history and card balance — can show up on that person’s credit reports. That means their credit can improve as a result of being added to a credit account you keep in good standing.

For people with no credit or poor credit, or people who’ve had their applications for credit denied, becoming an authorized user can be one of the few ways to start building a better credit profile.

Keep in mind that not all issuers provide information about authorized users to the three major consumer credit bureaus — Equifax, Experian and TransUnion. So if your goal is to help a friend or family member improve their credit, ask your issuer whether it reports authorized user account information to the three major consumer credit bureaus.

Drawbacks of adding an authorized user

Credit mistakes can do damage to both your credit scores

Your positive account information can help an authorized user build, or rebuild, credit. But if you make mistakes, or practice negative credit habits, you could potentially hurt that person’s credit too. If you miss credit card payments or rack up a big balance, both your credit scores and your authorized user’s scores could take a hit. Similarly, if the authorized user makes a mistake, like throwing off your credit utilization or making a late payment on a card connected to your account, it could negatively impact your credit.

Shared access to your account information

The access an authorized user has can vary by card issuer. For example, Discover says that an authorized user can request account information, including copies of the billing statements. That means that person can see information about how you’re using the card, including when and where you’ve made purchases. Additionally, when an authorized user pulls their credit reports, that person may see similar account specifics, like how much you owe on the card and whether you’re current on your payments.

Sole responsibility for all charges

Adding authorized users on your account can make it easier to cash in on points or other rewards, but it can also mean taking a bigger financial risk.

At the end of the day, regardless of who makes the purchases, you and you alone will be responsible for paying the bill as the primary cardholder. For that reason, it’s important to choose an authorized user you trust to use your account responsibly.


Next steps

Remember how intimidating it was to get your first credit card? Maybe it took you a while to learn how to use it responsibly and you made mistakes along the way. Adding someone you trust as an authorized user, maybe your child or another family member, could help that person get off to an easier start.

An authorized user can learn good habits, with less risk, while starting to build (or rebuild) a positive credit history. Just remember that it’s a two-way street: An authorized user’s credit habits can impact your credit as well.

If adding an authorized user seems like the right option for you, you can contact your credit card company or read your credit card terms to learn if and how you can add someone to your credit card.

If, on the other hand, you’re looking to open a joint credit card account with someone else, we have some advice to help you decide if a joint credit card account is right for you.


About the author: Sarah C. Brady is a San Francisco–based financial consultant, workshop facilitator and writer. In addition to writing for Credit Karma, Sarah writes for Experian, LendingTree, Magnify Money, MSN News and more. In her … Read more.