IWhether you’re helping someone build credit or just sharing a card for convenience, being an authorized user can be a smart option. But what does it really mean? Let’s dive into the rights and responsibilities that come with it, in easy-to-understand terms.
What is an Authorized User?
Being an authorized user means you’re added to someone else’s credit card account. You get a card with your name on it, and you can use it to make purchases just like the primary cardholder. However, you don’t own the account. The primary cardholder is the one who is ultimately responsible for paying the bill and managing the account.
For example, parents often add their teenagers or young adults as authorized users to help them build credit. Or, couples who share expenses might use the same card. This can be especially helpful for someone who doesn’t qualify for a card on their own or for managing a family’s budget.
What Can You Do as an Authorized User?
Here’s a breakdown of what you can do as an authorized user:
- Receive Your Own Card: Once added, you’ll get your own credit card with your name on it. You can use this card to shop online, buy groceries, or even add it to your mobile wallet.
- Make Purchases: As an authorized user, you have the power to make purchases just like the main cardholder. Whether you’re buying gas or paying for dinner, you can use the card wherever credit cards are accepted.
- Report a Lost or Stolen Card: If you lose your card, you can report it and get a new one. You don’t have to rely on the primary cardholder to do this for you.
- See Transaction History: You can track your spending by logging into the card’s account or app to see the transactions you’ve made.
- Dispute Charges: If there’s an issue with a purchase, like a charge you don’t recognize, you can file a dispute.
What Can’t You Do as an Authorized User?
Since you’re not the primary account holder, there are some important things you can’t do:
- Change Account Details: You can’t update the mailing address, contact information, or PIN for the account. Only the primary cardholder has that control.
- Adjust the Credit Limit: If you want more spending power, the primary cardholder would have to request an increase. You can’t do this yourself.
- Add Other Users: You don’t have the authority to add more authorized users to the account. Again, that’s something only the primary cardholder can do.
- Close the Account: If you no longer want to be an authorized user, you can remove yourself, but you can’t close the account entirely. That’s up to the primary cardholder.
The Gray Areas: Things You Might Be Able to Do
Some credit card companies give authorized users a bit more flexibility. For example:
- Set Spending Limits: Some cards allow the primary cardholder to set spending limits for each authorized user. This can be helpful for parents who want to control how much their child is spending.
- Manage Payments: You can often make payments on the account, which is helpful if you’re sharing finances. But even if you make a payment, the primary cardholder is still responsible for the full balance.
- Redeem Rewards: If the credit card offers rewards, you’ll earn points or cashback for your purchases. However, in most cases, only the primary cardholder can redeem the rewards.
Why Should You Become an Authorized User?
There are several reasons why you might want to be an authorized user. Maybe you’re sharing finances with a partner, or you’re trying to help a young adult build credit. Being an authorized user is also a great option for someone who doesn’t qualify for their own card but still wants the benefits of using credit.
One of the biggest benefits is that being an authorized user can help improve your credit score. If the primary cardholder has a good payment history and low credit utilization, that positive history can reflect on your credit report as well. This can be a great way to establish or build your credit without taking on the responsibility of a full account.
Conclusion:
To wrap up, being an authorized user on a credit card gives you access to credit without the responsibility of managing the entire account. You can make purchases, track your spending, and even help build your credit. However, remember that you’re not in full control, and the primary cardholder is the one who ultimately manages the account. If you’re looking to start building your credit or sharing expenses, this can be a great option.
