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Most credit card issuers let you add an additional person, such as a child or employee, to your credit card account without requiring that this person actually apply for the credit card themselves. This additional user is called an authorized user.
The authorized user receives a credit card with their name on it, and they can use the card just the same as if they were the primary account holder. All purchases the authorized user makes go to the same account and appear on one credit card statement. The authorized user shares the credit limit with the primary account holder and their purchases reduce the amount of credit available to both users.
Unlike a joint account holder, an authorized user doesn’t have to go through a credit check to be added to the credit card account. Some credit card companies may charge a fee for adding authorized users, while some rewards credit cards offer a bonus if you add an authorized user to your account.
Authorized User Permissions
The authorized user receives all the credit card privileges of the primary account holder, but has no legal responsibility for purchases made on the account. If there’s ever a lawsuit regarding debts on the account, the authorized user won’t be included, even if that person was responsible for the purchases.
Authorized users can make a payment on the account, even though they’re not required to.
For safety, authorized users can’t perform account maintenance activities such as adding other authorized users, changing the address on the account, requesting a credit limit increase, or negotiating a lower interest rate.
Credit History Impact
The credit card account history could show up on the authorized user’s credit report if that credit card issuer reports authorized user accounts to the credit bureaus. That’s great if the account has a positive payment history, and bad if the credit card payment has a history of late payments or maxing out the limit.
If an authorized user account is not showing on your credit report, there’s a good chance that credit card issuer, as a policy, doesn’t report authorized user accounts to the credit bureaus. A quick call to the card issuer’s customer service can let you know whether you can expect the authorized user account to show up in your credit history and with which bureaus.
After the subprime mortgage crisis of 2007, FICO score calculations were updated to give less weight to authorized user accounts overall, and also to exclude authorized user accounts added for the sole benefit of a credit score boost. For example, if a person pays a credit repair service a fee for authorized user accounts, FICO scores will likely not consider that account for calculating a credit score.
Adding an Authorized User
To add an authorized user, contact your credit card issuer by phone or by logging on to your online account. The card issuer will need the authorized user’s personal information, including their name, address, date of birth, and social security number, to process the request.
The company may impose a limit on the number of authorized users you can add to your account. And it’s probably for the best—the more people with spending access to your credit card, the harder it is to keep track of the charges.
Some credit card issuers allow you to set different spending limits for each authorized user on your account. Often this is as easy as logging into your account and changing each person’s limit.
Removing an Authorized User
Dissolving the authorized user relationship is almost as easy as starting it. Simply call the credit card issuer or log on to the primary account holder’s online account and request to remove the authorized user. The user’s credit card will be deactivated and they will no longer be able to make purchases.
Tips for Sharing a Credit Card With Someone Else
You might get a joint credit card account with a spouse, partner, or even a child to simplify bill paying, to merge your lives, or to help that person get a better credit score. Managing a joint credit card account isn’t always easy. You have to discuss everything you’d automatically decide when you have your own credit account.
Co-Signer vs. Authorized User
To share a credit card account, you can add a second person as an authorized user or as a joint account holder, also known as a co-signer. An authorized user isn’t legally responsible for making payments on the credit card but can make purchases on the account. Joint account holders are equally liable for making credit card payments. Both options have benefits. Before deciding which to choose, carefully consider your own situation.
Some banks report the activity of authorized users to the credit bureaus. This means so parents who want to help their children build credit sometimes will add them as authorized users to their accounts. Or, if one spouse has a low credit rating, the partner with the higher rating might add the other as an authorized user for the same purpose.
Not all card issuers report the activity of authorized users to credit bureaus, so be sure to confirm their practices before adding someone to your account.
Joint accounts are more common in relationships that involve equal financial responsibilities. Credit card issuers typically do not allow a joint account holder to be added after an account already exists, so both parties need to apply at the same time. Both parties share in the benefits and responsibilities just as they would with a joint bank account.
Managing a joint credit card is easier when both account holders have similar spending habits and financial goals.
Banks That Offer Joint Accounts
Not all card issuers offer joint accounts as an option. As of 2019, US Bank and PNC Bank are two examples of credit card issuers that still offer the option. Most other popular banks have moved away from the practice, but they do allow account holders to add authorized users. If getting a joint credit card account, be sure that this is what you’re getting. Policies and practices change frequently, so issuers may add or remove the option for joint accounts at any time.
For a joint account, both cardholders will need to supply their personal information on the application, and the card issuer will run a credit check on both applicants. The credit scores and credit backgrounds of both applicants will be considered when the issuer decides whether or not to approve the application and what terms and limits will be set if it is approved. No matter how good your credit is, you should expect a low credit limit and a high interest rate if your co-signer has poor credit.
The Ramifications of a Split
If you break up with your joint account holder, both of you remain responsible for paying the credit card bill. Not even a divorce changes the terms of the original contract. If the judge says each of you pays half the bill, and your ex doesn’t keep up their end of the deal, the credit card issuer doesn’t care—you’re both still liable for making payments. You also should be wary of revenge spending—when an angry ex runs up the credit card bill and doesn’t bother to repay it.
The credit card issuer may not let you close the joint credit card account until the balance has been repaid, so the other account holder could keep charging while you work to pay off the balance.
Closing an account is likely not the best option for your credit score since it will reduce your available credit and possibly shorten the average age of your credit accounts. However, it probably remains the best option after a split in order to prevent any further problems.
An account holder can remove an authorized user at any time, but authorized users may have difficulty removing themselves from an account by themselves, depending on the policies of the card issuer. Either account holder on a joint account should be able to close the account. If there is disagreement over how to handle the closing of an account, the terms should be outlined in a divorce agreement.
Sharing a credit card account with someone else does not have to be difficult, but there is planning involved that requires account holders and authorized users to discuss what they will use the card for, when they will use it, how they will pay for it, and more. These are some issues to keep in mind:
To maintain good credit, the maximum balance you keep should be no greater than 30% of your credit limit. Credit bureaus value available credit, so the higher your balance, the less credit you have available and the bigger the hit your credit score will take. Communicate with your partner about staying below the 30% threshold.
Can the Power of Attorney Add Signers to Bank Accounts?
In irresponsible hands, your credit card can morph from a little piece of plastic into a weapon that threatens everything from your good credit rating to your financial stability. You don’t have to share a joint account with your spouse to make purchases using the same credit card. Although you can give your spouse permission to use your credit card at any time, think long and hard before turning over your card. Keeping close tabs on your credit card – and its balance – is your responsibility. The only way to ensure that your account is 100 percent secure is to remain the only person who uses the card.
Credit Card Usage
You have the right to use your credit card as you see fit, provided you do so within the scope of your original agreement with your credit card company. This freedom of use includes allowing a third party, such as your spouse, to use the card when necessary. While it is legal for your spouse to use your credit card with your permission, you’re on the hook for any charges your spouse makes. This is the case even if you give your spouse specific limitations, such as where he can use the card or how much he can spend, that he subsequently ignores.
If your spouse needs regular access to your credit card, you can contact your credit card company and add your spouse to your account as an authorized user. After you add your spouse to your account, your credit card company will send him a card of his own. Don’t be fooled into thinking, however, that adding your spouse suddenly makes your credit card account a joint account. Because the account legally belongs to you and not your spouse, you are still responsible for paying off any debt he incurs.
Credit Card Misuse
Allowing your spouse to use your credit card, even just once, is a slippery slope. If your spouse later takes and uses your card without your permission, you may still be responsible for the charges he incurs – regardless of whether or not you were aware of his activities. While some courts have upheld that such behavior is clearly theft and constitutes misuse, other courts note that when you give your spouse permission to use your account, he has “apparent authority” to continue to make purchases with your credit card in the future.
If you allow your spouse to use your credit card, you probably trust him to make smart purchasing decisions. However, this very trust can leave you in financial hot water later on, as your spouse can use this trust to hurt your finances and damage your credit. For example, if you add your spouse to your account as an authorized user and you and your spouse later divorce, he can max out the credit card – leaving you treading water in a sea of debt. If you cannot pay off your spouse’s purchases, your credit card provider will report your missed payments to the credit bureaus and your credit rating will take a nosedive. To make matters worse, credit card companies retain the right to sue nonpaying consumers. A lawsuit from your credit card provider can leave you facing a financial nightmare that consists of property liens, bank levies and garnished wages.
Advantages and Disadvantages of a Joint Bank Account With a Spouse →
Be Honest With a Spouse Regarding Financials →
Authorized Signer Vs. Cosigner on Credit Cards →
How to Handle Inactive Credit Card Accounts
A good credit score makes it easier to get approved for mortgage and vehicle loans and standard consumer credit cards. Your credit score is based on your payment and length of credit history and the types of credit and loans you have in your name. Paying your bills on time and using your credit wisely helps to improve your credit score, however a few mistakes can lower the score. If you have a family member or friend who needs help to improve her credit score, you can add her as an authorized user to a credit card.
Contact your credit card company to see if it allows authorized users to be added. Inquire about how the company reports this information to the credit bureaus. Not all credit card companies will report positive credit activities for you and the authorized user.
Complete the application to add an authorized user. Many card companies have this form available on their website or it can be requested by mail. You will need the user’s full name, Social Security number and address.
Wait for the card company to review the application and approve it. If you requested that the new user to be issued a card, it will come in the mail.
Continue to make payments to your credit card on time each month.
Do Banks Need Your Signature to Pull Your Credit Score? →
Can You Withdraw Money From Visa Gift Cards at an ATM? →
Authorized Signer Vs. Cosigner on Credit Cards →
Share your Chase card with ones you love
Share the benefits of your card with family and friends.
Share the convenience of your account with loved ones. When you give loved ones access to your account, they get their own personal card and can enjoy full access to that account. And you can earn rewards on the purchases made by your family members or friends when you add them as an authorized user.
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All correspondence, including credit cards, statements, and notifications will be sent to the name and address on file for the primary cardmember. The primary cardmember is responsible for repaying all balances on this account. Authorized users will have the same account number and charging privileges as the primary cardmember but will not be financially responsible. Chase provides account information to the credit reporting agencies for all account users. This information could impact an authorized user’s credit score. When you tell us to add a user to your account, you’re confirming that you have a relationship with the person or people whose name(s), address(es), and date(s) of birth you’ve told us, that all their information is correct, and that you have their consent to add them. If Chase determines you’ve given us fraudulent name, address, or date of birth information, or did not have such consent, Chase can close this account.
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There are varying reasons you might want to pay someone with a credit card. For example, maybe you’re sending money domestically or internationally to a friend or family member.
Another reason to explore paying someone with a credit card could be to buy something from an independent seller, or maybe you need to pay someone who’s done work for you.
This could include someone who did in-person work, such as a home contractor, or someone who’s done online work for you or your business, such as a freelancer.
In the past, the main way to send money quickly to another person was the use of wire transfers, but a wire transfer can be costly.
You also have to provide quite a bit of information about the person you’re sending money to, and that might not be realistic for your situation.
When you’re looking for ways to pay someone with a credit card, you’ll need to consider fees and transfer speed, along with other factors such as the maximum transfer amount allowed.
Today I’m going over five ways to pay someone with a credit card, but first I’m going to talk about the pros and cons of paying someone with a credit card.
Pros of Paying Someone with a Credit Card
If you’re thinking about paying someone with a credit card, there can be good reasons to do so.
1. Credit Card Rewards
One reason you might want to pay someone with a credit card is to earn cash back or miles on your card, or perhaps meet the spending requirements for a sign-up bonus.
2. Fraud Protection
If you’re thinking about paying someone, particularly if it’s a situation where you don’t know the person, you may be worried about fraud.
If you use a credit card, the issuer is likely to have protections in place to safeguard against fraudulent transactions, and you may have dispute rights.
On the other hand, if you pay someone from a bank account or using a debit card, you may only have the protections offered by the payment platform itself, which are limited.
Some banks will say that if you sent the money, you’re responsible for the transaction. It’s more difficult to get cash back after you send it from a bank account or using a debit card, as compared to disputing a credit card charge.
3. Emergency Coverage
If you’re facing an emergency or an unexpected situation requiring you to send money to someone, you may not have the available cash to do so right now.
In this case, a credit card may be your only option.
Cons of Paying Someone with a Credit Card
Of course, there are several downsides of paying someone with a credit card to be aware of before launching this type of transaction.
There are some ways you might end up paying fees if you pay someone with a credit card.
First, most payment platforms and payment services providers will charge a fee of typically around 3% if you’re sending money with a credit card.
Then, on top of that, you may have to pay a cash advance fee to your credit card issuer, and the interest they charge may be higher on a cash advance than on normal purchases.
If you’re using a credit card because you want to earn rewards, you might find that the fees you pay are more than the value of the rewards you earn, so you have to do the math.
And of course, if you were to use a bank account or debit card rather than a credit card, you would pay no fee at all on many payment services apps and platforms, so keep that in mind.
2. Limited Service Providers
Many payment service providers don’t let you use a credit card to send money at all, so you have fewer options, which may mean you’re forced into paying higher fees or using a service you wouldn’t use otherwise.
3. Higher Exchange Rates
If you’re sending money internationally and use a credit card to do so, you may pay unfavorable exchange rates, whereas if you sent money using cash or a bank account, you may get more competitive rates.
5 Ways to Pay Someone with a Credit Card
Alright, so now that I’ve covered the pros and cons of paying someone with a credit card, I’ll now go over five ways to pay someone with a credit card.
Usually within one business day
Weekly limit of $2,999.99 for sending money, $2,000 per transaction for merchant payments.
$4,999.99 for all combined transactions
2.9% + $0.30 of the amount
Within one business day
$10,000 per transaction
Over 200 countries
3% to use a credit card and 1.5% to make an instant deposit
Instant or up to three days
$2,500 a week, after verifying your personal information
From instant to the next day or several business days
$10,000 per transaction
Over 200 countries
Depends on the bank
Can happen same-day, it may take two business days for funds to available to the recipient
Depends on the bank
Over 200 countries
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- Basics: Venmo is often described as a social network for sending money. You can add your friends to your Venmo account, and you can also see their transactions through your feed, although you can’t see the exact amounts.
You can make free Venmo transfers if you’re using your bank account, the balance you hold in your Venmo account, or you use a debit card or prepaid debit card. But if you pay someone with a credit card through Venmo, there’s a 3% fee.
There aren’t any protections for you as a buyer or seller through Venmo. The fact that Venmo does let you use a credit card to pay people makes it different from Zelle, which is Venmo’s primary competitor.
To send money with Venmo, both you and the person you’re sending it to need an account.
If you want to use Venmo as part of your strategy to max out credit card rewards, there is a limit on the number of credit and debit cards you can have linked to your account within a six-month period. Within six months, you can’t have any more than four cards, active or deleted.
Usually within one business day
• Weekly rolling limit of $2,999.99 for sending money through Venmo.
• $2,000 weekly limit per transaction for merchant payments.
• There’s also a weekly rolling limit of $4,999.99 for all combined transactions.
Image by Julie Bang © The Balance 2020
It’s the catch-22 of credit for young adults: you can’t get a credit card because you don’t have any credit, but you can’t build enough credit to qualify because you can’t get a credit card. It’s more difficult for young adults under age 21 to get a credit card on their own since federal law now requires credit card issuers to verify their personal income before granting a credit card.
Young adults, even college students, who don’t have enough income can’t get approved for a new credit card on their own. However, parents may help their kids avoid this dilemma by adding the child to one of their existing credit cards.
Many credit card issuers allow you to add an authorized user—a person who is authorized to make charges—to your account. The authorized user gets the benefit of the credit card without the legal responsibility of owning a credit card.
Adding an authorized user is different from creating a joint account. With a joint credit card, both parties are equally responsible for any balance on the card.
Why Add Your Child as an Authorized User?
Making your child an authorized user on one of your credit cards gives you the opportunity to teach them about credit and help them begin building a good credit score. At the same time, the child isn’t responsible for making credit card payments. That responsibility still falls on you, but you can involve your child in the process and teach them how responsible credit card use affects their credit.
Decide if Your Child Is Ready
Before you make your child an authorized user on your credit card, be sure you’re both ready to take that step. Here are some key questions to consider:
- Is your child trustworthy? Having a credit card is a big responsibility. Since you’re ultimately on the hook for the purchases made on your credit cards, you have to be able to trust your child to abide by whatever terms you set for the credit card.
- Does your child typically follow rules you’ve set at home?
- Is your child responsible with money?
Set a Few Guidelines
Before you call to add your child to your card, make sure you set some guidelines for how the credit card should be used.
- How much can your child spend?
- What are they allowed to purchase?
- Should they ask for your permission before making a purchase? Or let you know after they’ve made the purchase?
- Who’s going to make payment? By when?
- How long is the authorized user arrangement going to last?
Discuss the consequences of not following the guidelines, such as removing access for a month or lowering their purchasing limit. Stick to your word. If you say you’re going to remove your child’s authorized user status because they’ve charged too much, then it’s important to follow through.
Creditors aren’t lenient with mistakes, so having guidelines helps you teach your child that there are serious consequences of misusing a credit card.
Choose an Account
It may be better to open a separate account or to add them to a credit card that you seldom use. That way, your transactions aren’t mixed together and you can allow your child access to the online account without the concern of them viewing your transactions. Or, if you share a credit card with your child, make sure you leave a buffer of available credit so your child’s purchases don’t push the balance over the credit limit.
If you decide to add your child to one of your existing credit cards, choose one that has a completely positive credit history. Some credit cards report the entire account history to the authorized user’s credit report once they’re added to the account. It would be counterproductive to add them to an account that’s riddled with late payments and other negative items, as these would be added to your child’s credit and hurt rather than help.
Primary and Authorized User Card Responsibilities
Once added to the account, your authorized user will receive a separate credit card in their name. Some credit card issuers even issue different account numbers for authorized users. Even with their own card, the authorized user is simply allowed to make purchases on the account. They typically can’t make any other transactions, such as cash advances or balance transfers. Nor can they make changes such as closing the account, requesting a credit limit increase, or adding users.
Keep in mind that you’re responsible for all charges made on your card, even those made by an authorized user. Even if the authorized user has verbally agreed to pay for their charges, the credit card issuer generally holds the primary account holder responsible for the balance.
How to Boost Their Credit Score
Credit score boosts from authorized user accounts were almost eliminated when FICO decided it would no longer include authorized user accounts in its credit scoring model. The decision was based on the number of people who had exploited the loophole by purchasing access to authorized user accounts. Eliminating authorized user accounts would have hurt millions of consumers, so FICO instead tweaked its most recent credit score model—FICO 08—to only include legitimate authorized user accounts.
As long as all users on the account are engaging in responsible credit behavior, your child should see a boost to their credit. The VantageScore 3.0 also considers authorized user accounts when calculating a score.
When to End the Authorized User Relationship
Once your child can qualify for credit on their own, there’s not really a need to keep them as an authorized user. Once they have built good credit and have their own income, the authorized user setup has served its purpose. Removing your child’s authorized user privileges is as simple as making a phone call to your credit card issuer.
Making your child an authorized user is a big financial leap for both you and your child. Arm your child with the right information can help them develop healthy credit and money management habits that will benefit them throughout adulthood.
If you are just starting out in your financial journey — or have lackluster credit — building credit can seem impossible. How do you establish a credit history when you can’t even get approved for a loan or a credit card?
Adding yourself as an authorized user on someone else’s credit card could help to build and establish your credit.
However, there are some important factors to consider since becoming an authorized user can actually hurt your credit score if you’re added on an account that is not in good standing. Therefore, it is important to carefully consider all sides of this process to find out if it is right for you.
What is an authorized user?
An authorized user is someone who is permitted to use another person’s credit card. Once the original cardholder signs off on the authorization, the authorized user gets a card in their name that is linked to the original cardholder’s account.
The authorized user will likely not receive a monthly statement for the credit card.
However, some credit cards can break out spending made by the authorized user within the balance statement so the cardholder can understand which charges were made by whom.
Who can be an authorized user?
Authorized users are typically family members, legal guardians or trusted individuals of cardholders, but anyone can become an authorized user on another’s credit card.
What is the minimum age to be an authorized user?
Legally, there is no minimum age to gain authorized user status, yet most banks have their own minimum age policies regarding authorized users.
Do authorized users have spending limits?
Authorized users will be subject to the credit limit on the card, and the original cardholder may set spending limits for the authorized user if their bank or issuer allows it.
Do authorized users have to pay credit card bills?
The original cardholder is ultimately liable for charges incurred by an authorized user on their card.
How getting added as an authorized user can work for credit building
A credit check is not required to become an authorized user on someone else’s card. Yet banks and card issuers will often report the full payment history of the card, including the names of each individual card user, to the three main credit bureaus: Equifax(R), Experian(R) and TransUnion(R).
That’s how the authorized user approach serves as a credit building tactic. You don’t need good credit (or any credit) to become an authorized user, but if the bank or issuer reports your card’s full on-time payment history to the credit bureaus, you can begin to build a positive credit history.
How to build your credit as an authorized user
To build your credit history as an authorized user, consider these three details:
- Request to be added: Ask a friend or relative with good credit to add you as an authorized user. This can be requested by contacting the main account holder’s bank or credit issuer. Not all banks and card issuers provide authorized users’ card payments to the credit reporting bureaus. Before you go through the approval process, check with the main account holder to confirm that your payment history will get reported.
- Focus on a payment plan: The primary cardholder is responsible for paying the bill, but any missed or late payments will appear on both parties’ credit reports. Be sure to communicate with the main account holder to ensure there is a secure payment plan in place to avoid late or missed payments that could hurt both the main account holder and authorized user.
- Work closely with the main account holder: It’s important to avoid putting a strain on their card’s credit limit. Be sure to arrange spending limits that can accommodate a shared card account, without damaging the primary owner’s credit utilization ratio. This is the ratio between the total balance you owe and your overall credit limit to see how much credit you are using. Remember that the authorized user doesn’t have to use the card to benefit from the good credit behavior of the original cardholder.
Is an authorized user the same as a co-signer?
While being added as an authorized user is not the same as earning credit card approval through a co-signer, they are both options to start your credit history if you have little to no credit. There are some important differences between getting added to a card as an authorized user or signing up for a card with a co-signer:
Who is legally
liable for paying
credit card debt?
reported to the
Getting added to a
credit card as an
Earning credit card
approval with a
If cardholder cannot
pay, co-signer is
legally liable for full
How to get added as an authorized user
Ideally, you will find a close relative with excellent credit who is willing to add you as an authorized user.
In order to get added as an authorized user on someone else’s credit card, the cardholder will need to contact their bank or card issuer and request that you be added to their card account. They will need to provide some basic information to confirm your identity, as well as your name, Social Security Number, date of birth and contact information.
If the cardholder’s request gets approved, you will receive a credit card with your name on it that is connected to the original cardholder’s account. That person may opt to set spending limits on your card, depending on whether the bank allows it. Be sure to work with the main account holder so that you can be aware of any rules regarding card usage and specifics regarding payment reimbursement.
Building your credit the smart way
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. Be mindful of the following as you consider whether to get added as an authorized user:
- Confirm with the account holder that the card’s full payment history will get reported. They may need to check with the credit issuer or credit reporting agencies to confirm.
- Work together to maintain the card account in good standing. Don’t spend more than you are able to reimburse (if this is part of the agreement) the main account holder.
- Agree to a spending limit and plan to ensure that the main account holder is able to make consistent on-time payments. This payment history is one of the factors that can contribute to an increased credit score for the authorized user.
- Manage the card’s total utilization by keeping your credit card debts low.
As you begin to build your credit history, your experience as an authorized user can help you improve your credit score, but it can also help you understand how credit is maintained. By proactively engaging with your credit, you can grow your credit score as much as you grow your credit knowledge.