The pros and cons of being an authorized user on a credit card


Having friends has its benefits, especially if that friend allows you to be an authorized user on their credit card.

If you’re considering asking someone you trust to be added as an authorized user on any of their cards, it’s important to know what you’re getting into with that decision. Instead of getting your own credit card, you may be considering taking this step so that you have access to a card when you need it. There are advantages and disadvantages of being an authorized user. Read on for the pros and cons of being an authorized user on a credit card.

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What is an authorized user?

An authorized user is a person authorized to use a credit card account. Although they can legally use the credit card, they are not responsible for paying off credit card debt. Most major credit card issuers allow their cardholders to add an authorized user to their account.

Can someone be added as an authorized user?

Most credit card issuers have age requirements for authorized users. Other than that, there are no restrictions.

The benefits of being an authorized user

Being an authorized user on a credit card has its advantages:

  • It can help build credit. For someone with little or no credit, being added as an authorized user can help them achieve a good credit score. This is because many credit card companies report the account history on an authorized user’s credit report. This can be useful in the future when trying to open your own credit card account.
  • It gives a person access to a credit card. With a bad credit history or a bad credit rating, it can be difficult to get a credit card. Being added as an authorized user can give you access to a credit card, which can be especially useful in an emergency.
  • You can learn to manage your money. Being an authorized user is a great way to learn how to manage your money better. You can learn to do smart financial decisions before opening your own credit account.

The disadvantages of being an authorized user

Here’s what you should look for:

  • The actions of the account holder can have a negative impact on your credit. If the credit card holder is missing payments or accumulating a lot of debt on the card, it could negatively impact your credit. Before being added as an authorized user, it is a good idea to determine whether the credit card holder is financially responsible.
  • They can remove you at any time. The credit card holder can remove you as an authorized user at any time. When this happens, this account will no longer appear on your credit report. This is something to consider if you want to increase your credit.
  • This could cause relationship problems. If you and the cardholder disagree on what fees you charged or how much you owe them, it can cause additional stress and lead to relationship problems. Consider setting clear limits and ways to track purchases made to minimize disagreements or confusion.

The bottom line

Being added as an authorized user may be a good option for you. But you have to be well aware of the positive and negative aspects. Discuss this opportunity with someone you trust and outline the expectations and rules. Then you can both decide if it’s the right decision to make.


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