What is an authorized user?

If you’re just starting to build your credit history, or if your credit scores have taken a hit because of some financial missteps, an easy way to add positive information to your credit file is by becoming an authorized user on another’s credit card. This is also called “piggybacking.”

Becoming an authorized user isn’t only useful for repairing credit. It can also make sense for sharing a credit card with a spouse or teaching a child about responsible financial practices.

However, becoming an authorized user can backfire for both the person who is added to the account and the primary account holder if you’re not careful. We’ll explain what to look out for.

New to credit? These are our picks for the best first credit cards to build credit history.

What is an authorized user on a credit card?

An authorized user on a credit card is someone who is added to an existing credit card account owned by a trusted family member or friend. 

Typically, an authorized user can be added to a card account for free, although some issuers charge a fee for each authorized user who is added to the account. The authorized user will then be supplied with a credit card associated with that account with their name on it, allowing the authorized user to make purchases with the card.

Once added as an authorized user, the account and payment history associated with the card will then show up on the authorized user’s credit reports.

It’s important to understand that an authorized user is not held responsible by the credit card issuer for any charges they make on the card — it’s officially the primary account holder’s responsibility to pay off the balance. 

On the flip side, it’s also worth noting the authorized user does not actually need to make purchases on the authorized user card to have the account reported to the credit bureaus. 

For example, parents who want to jumpstart their child’s credit but don’t yet trust them to use the card responsibly don’t have to provide the physical card to the child in order for it to show up on their credit report. (But know that even if you can add your child to the account, some credit card issuers won’t report activity to their credit file until the child turns 18.)

 Similarly, primary cardholders who want to help out a friend or family member whose credit needs a boost, but don’t want to assume the responsibility of keeping track of the authorized user’s charges, don’t need to provide the authorized user card to the person they are trying to help.

An authorized user is considered a guest on the primary account holder’s card and cannot make changes to the account, such as increasing the credit limit or changing the account terms. 

Finally, an authorized user is not considered to be a joint account holder on the card, meaning the responsibility for the account is not shared with authorized users. If the account goes into default, only the primary account holder is held liable for any unpaid balance. However, this would hurt both the primary cardholder’s and authorized user’s credit scores.

What are the benefits of being an authorized user?

Depending on your current credit profile, becoming an authorized user on another’s card account can build up a thin or non-existent credit history. Adding a long-held card account to your credit profile should boost your credit score, as long as the account is in good standing. This can be particularly helpful for those new to building credit, such as a young adult or newcomer to the United States.

Once you become an authorized user, that card account, credit limit, account balance and payment history is typically reported by the lender to the three credit bureaus (Equifax, Experian and TransUnion). After 30 days, you should check your credit reports from each of the credit bureaus to see if the account is being reported and positively affecting your credit profile. You can pull your credit reports for free once a week through December 2023 at AnnualCreditReport.com. 

If you want to offset negative credit report information such as late payments or defaults with some positive information to help boost your credit score, being an authorized user on a card with an excellent on-time payment history and low credit utilization (meaning the balance is below 30% of the card’s credit limit) can help you do that.

What are the benefits of having an authorized user

There is no credit score benefit for the primary cardholder to have an authorized user on a card. Because of this, it is much more beneficial to be granted authorized user status than being the authorized user grantee. However, primary cardholders can profit from any points or cash back earned on an authorized user’s purchases.

The authorized user generally does not get a monthly billing statement, but the primary cardholder’s bill may detail authorized user charges separately on the primary cardholder’s statement.

The primary cardholder is ultimately responsible for any and all charges made on their card and any authorized user cards. Because of this, there is more risk than benefit for the primary cardholder. There is nothing preventing the authorized user from going on a spending spree and refusing to reimburse the primary cardholder for those charges. 

That’s why it can be safer to just add someone as an authorized user to a card, but never actually give them the card or card details to prevent runaway charges. However, note that it’s possible for an authorized user to bypass the primary cardholder and directly contact the credit card issuer, asking for a copy of their authorized user card, and the credit card company may consent. 

What to consider before being added as an authorized user

Since the goal of becoming an authorized user is to improve your credit profile (or build a credit profile from scratch), you’ll want to be careful about who you ask to add you. 

For example, being added to a card that has a history of late payments and a high balance likely won’t help improve your score. Payment history and credit utilization are the two most important factors impacting your score (accounting for 35% and 30% of your FICO Score, respectively).

Not sure what your score is? Here’s how to check your credit score. 

So, as an authorized user, you’ll want to be added to a card that has a long history of on-time payments and a low balance, so those factors will reflect positively in your credit profile. Plus, being added to a card that the primary cardholder has had for many years will also help your credit score. This is because length of credit history accounts for 15% of your credit score.

When someone agrees to add you as an authorized user to a long-standing credit card with a solid payment history, be mindful that they are taking a risk. Once you have the card, you not only have the ability to damage both your credit scores by overspending with the card, you could also destroy your relationship with that person. So proceed responsibly.

On the flip side, authorized users don’t control the account, so if the primary account holder is experiencing financial difficulty and is racking up a big balance and missing payments, that negative activity may actually hurt your credit score. If that happens, you’d be much better off removing yourself as an authorized user and applying for your own credit card.

Getting a secured credit card, which requires you to submit a deposit to the issuer in the amount of your desired credit limit, is one way to strike out on your own if you have limited credit history.

How to add and remove an authorized user

Most mainstream credit cards allow authorized users to be added to the account. However, your issuer may limit the number of authorized users, unless the card is a small business card where an unlimited number of employees can be added as authorized users. 

Adding an authorized user

All the primary account holder has to do is call the issuer or visit their card’s online portal to request adding an authorized user to their account. The card issuer will need the authorized user’s name, address, date of birth and Social Security number to generate the request. 

Some issuers also allow the primary account holder to establish a credit limit specifically for the authorized user, which could limit the primary account holder’s liability should the authorized user go rogue with the card.

Also, primary account holders who are applying for a new credit card can generally add authorized users right away during the application process.

Removing an authorized user

Taking an authorized user off the account is just as easy. The primary account holder or the authorized user can call the number on the back of the card or go online to generate the request. 

Once removed, the authorized user card can no longer be used. And be aware, as the authorized user, you’ll lose that line of credit, which could negatively impact your credit score.

In a situation where the primary account holder has maxed out the credit card or is behind on payments, it’s wise to remove yourself as an authorized user and make sure those negative actions don’t drag down your credit score.

It’s possible that once you’re taken off the credit card account, information associated with the account will naturally fall off your credit reports. But, if that doesn’t happen, you should be able to dispute the account with the credit bureaus and request that it be removed from your credit profile.

Once an authorized user is ready to apply for their own credit card, it’s best to wait until after you’re approved for a new card before being removed as an authorized user. This will prevent a sudden drop of the authorized user’s credit score after being removed from the primary account holder’s card, which could affect the new card application.