Credit Cards

How To Add Authorized User Back Of America

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

Adding an authorized user to your credit card is a common feature offered by many banks and credit card companies. Is this a wise decision? Increasing your credit score can be a laborious process that takes time and effort. Authorized users of a credit card, on the other hand, can benefit from some assistance in building up their credit history. Add an authorized user in order to assist someone in gaining a leg up on their credit rating and/or to give a simple method for them to access funds.

Here’s everything you need to know about adding an authorized user to one of your credit card accounts.

In a credit card, what is the role of an authorized user?

Someone who has your authorization to use your credit card is an authorized user. So, they may make transactions and get a hold of the credit account under your name with a card that was issued in their name alone. While you may add anybody to your card, the most popular application is to include members of your close family. There are several reasons why primary cardholders choose to add a spouse or a kid as an additional cardholder.

However, it’s critical to realize that an authorized user isn’t the account’s primary owner. The account belongs to you alone, yet you’re allowing someone else to make purchases on your behalf.

Let me give you an example: when we were married, my husband made me a cosigner on all of his credit cards. His account number was on a credit card I received in the mail, but it was in my own name. I was able to sign the receipts for the transactions I made with his credit card. Because of this, it was simple to use his account to buy stuff.

Pros and Cons

An authorized user on a credit card has both positive and negative aspects. You should carefully assess the advantages and disadvantages of granting someone access to your account before you do so.

Pros

  • Help the authorized user establish credit. Your good credit history might be used to the benefit of the authorized user. The authorized user’s credit record is impacted by your credit card payments. Credit scores can be improved if you consistently pay off your credit card each month.
  • An authorized user can make purchases in their own name if you want someone to be able to do so easily. In the event of an unexpected cost, my adolescent son would have the option of using the account of an approved user.
  • It’s simple to add an authorized user because there’s no need to run a credit check in most circumstances. It might be difficult to add a co-owner to an account.
  • The Chase Sapphire Preferred credit card, for example, gives you an additional reward point if you sign up as an authorized user.
  • The money they spend is money you get to keep: In addition, many credit cards with rewards programs, such as the American Express Gold Card, may credit your rewards account for purchases made by authorized users.

Cons

  • Authorized users are accountable for any charges they make on your credit card, even if you have requested them not to spend on particular goods.
  • Your credit score might be harmed if you may experience a decline in your credit score if an authorized user racks up costs that you can’t afford to pay. A high credit utilization ratio (which gauges how much of your available credit you’re using) or a series of missed payments might occur.
  • Additional cards from certain issuers may incur a fee. You may have to pay a charge for each additional card or an annual cost for an additional user, depending on the card issuer.
  • Your account may have been accessed by someone who is authorized to do so. Although an authorized user may only do so much with your account, you may not want the authorized user to have as much access as possible to your personal information. Authorized users can retrieve account information, like as statements, through Discover, for example. Adding an authorized user might be a drawback if you wish to keep your information secret.

Is it a good idea to add an approved credit card user?

Consider if adding an authorized user to a credit card makes sense for your scenario before doing so. Analyze your motivations for adding a new authorized user and whether or not doing so will assist you in achieving your objectives

Consider whether or not you can put your faith in the designated user. You may want to give your child access to your credit card, but do you really believe they would use it responsibly? Is there any evidence that they are capable of becoming responsible? Consider their financial history and current situation before adding them to your account.

Adding someone as an authorized user necessitates open lines of communication. Don’t forget to check in with your significant other before making a big purchase. You don’t have to worry about going over your credit limit, and you’re always on the same page. Next, take a look at any additional costs your account could impose on new users. Even if you believe the authorized user to be trustworthy and responsible, it’s possible you won’t want to pay for a second card in their name.

If you are the primary account holder, you should also think about how much control you have over the account. You may establish spending limitations for authorized users on American Express cards, for example, which is useful if you’re adding a youngster to your account. Also, check to see if your account offers a variety of tracking options. Separating the spending of authorized users from your own might help you keep tabs on where your money is going.

Instead of adding an authorized user, should you establish a joint account?

It’s possible that you won’t be able to add a joint account holder because not all credit card companies allow it. But if you are authorized to have a joint account holder, it is crucial to understand that both of you are equally liable for the account’s financial decisions. Another advantage is that joint account holders have equal privileges, so they may decide whether or not to keep their accounts open by adding other members or closing them altogether.

A joint bank account may be easier to manage if you’re in a relationship, but it may also present complications if you break up. Due to my divorce, we were forced to shut our joint account since one of the account holders could not be removed. In comparison, it was straightforward and quick to remove my ex as an authorized user on my credit cards.

Consider the scenario and the degree of power you want to give the other person before making a decision to do something. Authorized users may be the best option for you.

What is the procedure for adding an authorized user to your credit card?

Depending on the credit card issuer, you’ll need to check with them to see if you’re eligible as an authorized user. To add an authorized user to your credit card, you’ll need to provide the following information:

  • Full name
  • Date of birth
  • Social Security number

For the additional user, you may be asked for their phone number or address. By dialing the customer care number or entering into your online account, many credit card issuers allow you to add an authorized user.

Bottom line

An authorized user is a good or bad idea, depending on your circumstances and goals. Even while adding an authorized user to your credit card is useful and can assist someone you care about to improve their credit, you can still limit their ability to make purchases using your card.

However, it is vital to bear in mind that you are ultimately accountable for any costs, so it is a good idea to ensure that you have appropriate control over the situation and that you can trust the authorized user to be responsible.

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