Introduction

Most credit card companies allow you to add a second person to your accounts (an "authorized user"), such as a kid or an employee, without having that individual apply for a credit card on their own. In this scenario, the authorized user is issued a credit card in their name and is given full access to the account, just like the principal cardholder. All authorized user purchases will be consolidated into a single credit card statement.

Adding an Authorized User

Adding an authorized user to your credit card account may or may not incur any fees from your card issuer. However, you should be aware that there may be a yearly charge for adding an approved user. Get in touch with your card's issuer to update their contact details. A credit card can be issued to an authorized user, but it is ultimately up to you, the principal account holder, to decide whether or not to grant that person full access to your account.

Contact your credit card company by phone or online to be added as an approved user. When requesting, the credit card issuer will need the authorized customer's name, birth date, and social security number. There may be a cap on how many people can be added to your account as approved users by the company. It's for the best, though, because keeping tabs on credit card charges becomes more of a nightmare as the number of people who can use your card grows.

Removing an Authorized User

It's nearly as simple to end the authorized user connection as it was to establish it. To cancel an authorized user's access to a credit card account, the primary cardholder should only contact the credit card issuer or sign into the account's web portal. Credit card use will be disabled, and the user will be unable to make further purchases.

Benefits Of Adding An Authorized User

Help Someone Get A Fresh Start

A person's credit report may include the credit limit, payment history, and card balance of a credit card account if that person is added as an authorized user. When they add their name to an account you keep in good standing; it can help their credit score.

Becoming an authorized user can be one of the few options available to persons who have no credit history, a limited credit history, or whose credit applications have been declined. Remember that not all issuers report authorized users to the three major consumer credit bureaus. To find out if an issuer reports authorized user account information to the three major consumer credit agencies, which you can utilize to help a friend or family member build or repair their credit, you should contact your issuer.

Drawbacks Of Adding An Authorized User

Make sure your credit reports are error-free to avoid a drop in ratings.

An authorized user's access to your account information can be used to assist in establishing credit in their name. Their credit scores could be hit due to blunders or poor financial behaviour. Your and the authorized user's credit could be hit if you consistently make late payments or carry a high balance. You could damage your credit if an authorized user makes a mistake, such as increasing your utilization ratio or missing a payment.

Account Sharing

The issuer of the card is the one who decides who is allowed entry. All your Discover account data, including monthly statements, are available to anybody with the proper authorities upon request. Your spending habits, including when and where you made purchases, will be visible to that person. Authorized users access your whole financial history whenever they pull your credit report.

Sole Responsibility For All Charges

Adding authorized users to your account can simplify the process of redeeming points or other rewards, but it can also increase your exposure to potential loss. As the principal cardholder, you are entirely and alone responsible for all charges incurred on your account, regardless of who used the card to make purchases. This is why it's crucial to add a trusted person as an authorized user to your account.

Conclusion

When someone is an authorized credit card user, they can use the card but are not personally responsible for any charges made with the card. Authorized users on personal credit cards are often members of the immediate family or close acquaintances. Although there is no legal minimum age for an authorized user, some financial institutions impose such limits. The cardholder and the authorized user work up a payment plan for the authorized user to cover the cost of any transactions made using the card. Authorized users are supplementary account holders who are not primary account holders.