What is a Credit Card Authorized User?
An authorized credit card user is a person who has permission to use another person’s account. credit card but is not legally responsible for payment of the invoice. For personal cards, authorized users are usually family members, such as a child or spouse. Depending on the credit card issuer, some credit card companies provide a unique card to authorized users linked to the primary account holder. Others simply authorize an authorized credit card user to make purchases with the primary account holder’s card.
Authorized users typically report lost or stolen cards, receive account information such as credit limit, available balance, and fees, make payments, and initiate billing disputes. Cards generally do not allow Authorized Users to close an Account, add another Authorized User, change address, or PIN or request a change in credit limit or interest rate.
Understanding Credit Card Authorized User
An authorized credit card user is not responsible for any payments he charges to the credit card. Although the Cardholder generally expects the Authorized User to pay the costs of anything purchased with the Card, this is ultimately an agreement between the Cardholder and authorized user. For example, if one member of a couple is an authorized user on the other’s credit card and the couple separates, the cardholder is legally responsible for covering all charges on the card if the user authorized refuses to make payments.
Authorized Users sometimes choose to simply pay the cardholder any money owing on the card, so that the cardholder can pay the balance, or the cardholder gives them access to the card account so that the authorized user can make the payments himself. In some cases, such as when a child is an authorized user, the cardholder simply pays the entire balance on their own.
Credit effects
Many people become authorized users of other people’s credit cards in order to build up or rebuild their credit. If a person has no credit, or if their credit score is particularly low, they can potentially increase their credit score by becoming an authorized user of a credit card that the cardholder uses responsibly. However, if the Cardholder does not use the Card responsibly and their credit score goes down, it can potentially lower the Authorized User’s credit score.
Similarly, an authorized user can lower a cardholder’s credit score, depending on how they use the card. Suppose a cardholder and an authorized user have a personal agreement that the authorized user must pay the issuer directly for all fees charged to the card. However, if the Authorized User fails to make payments on time and the Cardholder is either unaware of this or unable to step in and make payments himself in order to avoid late payment, the cardholder’s credit suffers due to late payment on the primary cardholder’s credit history.