Authorized user

Someone added to another person’s credit card account who gets a card and charging privileges but is not legally responsible for the debt.

What it means

The primary cardholder can add an authorized user, such as a spouse, partner or teenager, who receives a card linked to the account. The primary cardholder is responsible for paying all charges, including the authorized user’s purchases. Some issuers let the primary set spending limits on the user’s card.

Many issuers report the account to the authorized user’s credit reports, which can help someone with little history build credit, assuming the account has a long history, low utilization and on-time payments. The reverse is also true: late payments or high balances can hurt the authorized user’s credit. Reporting practices and age minimums vary by issuer.

Example

For example, a parent with a 10-year-old card account, a $10,000 limit and a perfect payment record adds their 18-year-old. If the issuer reports it, the account may appear on the teen’s credit report and help them establish a score.

How it’s used

Helping a family member start building credit
Sharing a card for household expenses
Rebuilding credit with help from a trusted person

Strengths and weaknesses

Strengths

Can build credit without a new application
No legal liability for the user
Easy way to share household spending

Weaknesses

Primary cardholder is on the hook for all charges
Missed payments or high balances can hurt both people
Not all issuers report authorized users

Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.