If you're looking to build credit, becoming an authorized user on someone else's credit card is a smart option. It can be relatively low-risk and allows you to build or boost your credit score. But before you sign up there are some things you should know.
Below, CNBC Select reviews common questions about what's involved in being an authorized user on a credit card.
What is an authorized user?
An authorized user is an additional cardholder on someone else's credit card account. You have a credit card in your name that is linked to the primary cardholder's account.
How can being an authorized user affect your credit?
When you're added as an authorized user to someone else's credit card account, you can piggyback off their credit. With that in mind, you should really only become an authorized user on an account owned by someone with good (670-799) or excellent credit (800-850). Most major card issuers report authorized user data to the three main credit bureaus — Experian, Equifax and TransUnion — but you can call your issuer to confirm.
What responsibilities does an authorized user have?
An authorized user has no liability whatsoever. Authorized users can make charges, but they aren't responsible for bill payments. The primary cardholder has complete liability and is responsible for making payments, redeeming rewards, requesting credit limit increases, etc.
That said, it's essential for authorized users to show good financial habits when using someone else's card. You should not spend beyond your means, and you should make a clear plan with the cardholder to pay off your balance on time and in full each month.
You also don't have to actually use the card to see your credit score rise as the result of being an authorized user. So if the cardholder doesn't feel comfortable trusting you with your own card, you'll still benefit from being linked to their account.
How do I add/become an authorized user on a credit card?
The primary cardholder has to add you as an authorized user. You can either do it online, via your bank's mobile app or over the phone. The process can be completed within a few minutes, and your card will likely be mailed to the primary cardholder's address. Sometimes there's the option to ship the card to an alternative address.
And if you already added someone as an authorized user on one card from an issuer, the process is often quicker to add them to an additional card from the same issuer. For example, if you already added your spouse to your Blue Cash Preferred® Card from American Express, then you would just have to select their name to add them to your American Express® Gold Card instead of reentering the information. Terms apply.
How much does it cost to be an authorized user?
Depending on the credit card you're added to, it may cost nothing to be added as an authorized user. However, some credit cards charge a fee for authorized users. For example, the Chase Sapphire Reserve® charges $75 annually for each additional card.
Credit cards that don't charge authorized user fees include: Chase Sapphire Preferred® Card, Capital One Venture Rewards Credit Card, Bank of America® Customized Cash Rewards credit card, and Citi Double Cash® Card. (See rates and fees.)
How do I remove/get removed as an authorized user on a credit card?
Depending on the card issuer, the authorized user may be able to call and asked to be removed from the card. In other cases, the primary cardholder will have to call the bank themselves to ask for the removal of any authorized users they no longer want to have access to the card.
What's the next step after being an authorized user?
After you've been an authorized user for a while and you've seen your credit score increase, you may want to apply for your own credit card. Consider some of the best cards for rewards (American Express® Gold Card), cash-back (Citi Double Cash® Card) and travel (Capital One Venture Rewards Credit Card).
Information about the Bank of America® Customized Cash Rewards credit card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
An authorized user is someone who's been added to a credit card account by the card's owner, also known as the primary cardholder. The authorized user can make purchases with the credit card as if it were their own. However, the responsibility to pay any charges remains with the primary cardholder.
What are the cons of being an authorized user on a credit card? ›
While authorized users receive their own credit card, they do not have all the same permissions as the primary account holder. For example, authorized users typically cannot redeem rewards, request a credit line increase, close the account or add another authorized user.
How much will my credit score go up if I become an authorized user? ›
A 2018 Credit Sesame survey found that people with bad credit who were added as authorized users saw a 24% increase in their FICO Score in 6 months and a 30% increase in 12 months. The lower your starting credit score, the more you benefit from being an authorized user.
Will adding someone as an authorized user help their credit? ›
Being added as an authorized user on another person's card may help you establish a credit history or build your credit. Yet cardholders and authorized users' on-time, late or missed payments will be added to both parties' credit reports, so it's important that cardholders and authorized users see eye to eye.
Will removing myself as an authorized user hurt my credit? ›
“However, if you have a credit account that's two years old and an authorized user account that's eight years old, removing the authorized user account could hurt your credit score.” Keep in mind there are many variables involved in credit scoring.
How fast does an authorized user build credit? ›
Authorized user accounts must show up on your credit report to affect your credit score. As for how long it takes for authorized user to show on credit report, you might see your score change as soon as the lender starts reporting that information to the credit bureaus, which can take as little as 30 days.
Why did my credit score drop when I was added as an authorized user? ›
If there's a history of late or missed payments on the account you've been added to, or if that account has a balance that exceeds about 30% of its credit limit, it will tend to lower the credit scores of the primary account holder—and potentially yours, as an authorized user.
Does an authorized user get their own credit limit? ›
The issuer will send the authorized user a credit card linked to your account, as long as the user meets age or other requirements. The number of authorized users you can add to a card will depend on the credit card issuer. If the issuer allows it, you may be able to set a spending limit for the authorized user.
Can an authorized user become the primary card holder? ›
Generally, card issuers don't let authorized users: Become the primary cardholder. Change the mailing address, contact information or account PIN. Request a change to the credit limit or annual percentage rate (APR)
Do authorized users build credit capital one? ›
Adding an authorized user to your Capital One account helps you see household purchases in one place. And it could help a loved one establish credit. It's important to remember that the only way to build credit with a credit card is with responsible use.
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 in a way that hurts your financial situation, negative credit impact could follow.
What happens when you re removed as an authorized user on a credit card? ›
Summary. Removing yourself as an authorized user can lower your credit utilization ratio and the age of your credit history, both of which can have a negative impact on your credit score.
Do authorized users get clear credit? ›
Technically speaking, the CLEAR Plus benefit applies to all CLEAR transactions made by you or your authorized card members up to $189 per year. That means if you qualify for CLEAR® Plus discounted memberships, you may be able to cover multiple members using a single $189 statement credit.
Does authorized user hurt your credit score? ›
Being an authorized user on a credit card could affect your credit positively if the account holder makes on-time payments and keeps the credit utilization rate low. If they don't, your credit could take a hit.
Should I add my wife as an authorized user? ›
The bottom line
Adding your partner as an authorized user on your credit card can help them build credit, and sharing a line of credit can help you both balance the household budget.
Will adding someone as an authorized user help their credit capital one? ›
Adding a user won't impact your credit score—only the usual factors like payment history and available credit do that. As long as you and your user use your card responsibly and make payments on time, these actions can have a positive impact on your user's score.
