What is an authorized user on a credit card?
Adding an authorized user to your credit card can help them build a positive credit history when used responsibly.
Updated 
11 min. read
Credit cards can be a convenient tool for spending, and when used responsibly, they can also help to build a positive credit history. If you have a credit card account, you might consider adding someone else to it as an authorized user. Before you do so, it's important to understand how it works as well as the potential pros and cons.
What is an authorized user on a credit card?
An authorized user on a credit card account is someone that a primary cardholder has added to their account. Adding an authorized user to a credit card account grants that individual purchasing privileges but does not make them liable for any resulting debt.
When you add someone to your account as an authorized user, they get a credit card with their name on it that’s tied to your account. Aside from making balance transfers, the card works like yours does, meaning they can use it to buy gas, pay for groceries and shop online. If you’ve got a rewards credit card, their purchases can earn cash back, or miles.
Who can you add as an authorized user? Credit card companies can set their own rules for who qualifies but the list can include:
- Children who meet the age requirement (this can vary depending on the issuer)
- Spouses or significant others
- Friends or other family members
You might be wondering why you would want to add someone to your credit card account. One of the most common reasons is to help them build credit.
When you add an authorized user to your credit card account, your credit history for that account gets reflected onto their credit reports (depending on the issuer). As long as you're paying the bill on time and keeping your credit card balances low, they can benefit from your good financial habits.
If you're a parent, for instance, adding your teenager or college student to one of your cards can help them get a head start on establishing credit. And you don't actually have to give them a card to use in order for them to benefit unless you feel comfortable doing so.
What is the difference between a primary cardholder and authorized user?
When two people have access to a credit card account and they both have cards with their names on it, who does it really belong to? It’s a good question and there’s a simple answer.
The person who opened the account, known as the primary cardholder, is responsible for paying the balance on the account and the authorized user doesn’t.
Opening a credit card account typically requires a Social Security number so the card issuer can check your credit. Your Social Security number also ties your credit card account to your credit report.
If approved, the credit card issuer can then decide how much of a credit limit to offer you and what annual percentage rate (APR) to charge. A higher credit score may translate to a lower rate or a higher limit, or even both.
Authorized users don't apply for a credit card themselves; instead, the primary cardholder adds them to their account. An authorized user can use the card to make purchases as described already, but there are limitations on what else they can do.
Here's a side-by-side comparison of a primary cardholder vs. an authorized user.
Primary cardholder | Authorized user | |
|---|---|---|
Applies for the card | Yes | No |
Has purchasing power | Yes | Yes |
Is responsible for the debt | Yes | No |
Has full access to card features | Yes | No |
Authorized users vs co-signers vs joint account holder: what’s the difference?
By now, you know what it means to be an authorized user. But what about a co-signer or joint account holder? How are they different (or similar)?
Authorized users receive their own credit card to use, but they don’t own it and it’s not in their name. Some lenders may ask for a co-signer to sign their name to a debt alongside someone else, but they won’t have access to the credit limit. If it sounds confusing, here’s an example. Say that your cousin wants to get a personal loan to buy a car. They don’t have sufficient credit to qualify on their own, so they ask you to co-sign. You agree, and the lender approves them for a $10,000 loan after checking both your credit scores.
Even though your name is on the loan, your cousin is the one who uses the loan funds. Because you co-signed, you’re legally responsible for the debt if they don’t pay it back.
A joint account holder is similar to a co-signer in that they’re both responsible for the debt. The main difference between these two is that a joint account holder has access to the loan or credit limit, whereas the co-signer doesn’t.
Here's another table breaking down the differences at a glance.
Authorized user | Co-signer | Joint holder | |
|---|---|---|---|
Who applies | Primary cardholder | Co-signer and primary cardholder | Both account holders |
Who controls the account | Primary cardholder | Co-signer and primary cardholder | Both account holders |
Who is liable for the debt | Primary cardholder | Co-signer and primary cardholder | Both account holders |
Who can use the card | Primary cardholder and authorized user | Primary cardholder | Both account holders |
Note: Co-signing is typically more common when taking out student loans, auto loans or other lines of credit. Most major credit card issuers no longer offer co-signed cards.
An authorized user on a credit card is someone that a primary cardholder has added to their account. Adding an authorized user to a credit card account grants that individual purchasing privileges but does not make them liable for any resulting debt. A joint cardholder though, is responsible for the debt.
Who can become an authorized user and how many can I have?
Anyone can be added as an authorized user as long as they meet the card issuer's requirements. For example, say that you'd like to add your 12-year-old son to one of your credit cards. Your card issuer might require you to wait until he turns 15 to make the addition.
Age requirements can vary by card and card issuer. There can also be restrictions on the number of authorized users you can add to a single card. BMO, for instance, sets the minimum age at 15 and allows primary cardholders to add up to five users per credit card account.Before adding an authorized user to a credit card account, it's helpful to consider the reasons for doing so and the relationship that you have with the person. Adding someone who's not financially responsible could be risky since you'd be on the hook for any purchases they make with the card.
What are the responsibilities, legal rights and obligations of an authorized user?
Authorized users are not legally responsible for any debt associated with a credit card account that they're added to. That means that, technically, they could rack up a sizable balance on the card and the person who would have to pay is the primary cardholder. Even if the primary cardholder were to default on the account or pass away, the authorized user would not have to repay the debt.
Finding yourself saddled with debt is not ideal, especially if it puts a strain on your budget. As the primary cardholder, you may be able to set some controls on what an authorized user can spend if the card allows it.
For example, you might cap them at $50 per day or $1,000 per month. Those types of controls can keep an authorized user from running up debt in your name.
Thinking of adding someone to one of your credit cards as an authorized user? Don’t jump in without weighing the pros and cons first. And it’s also a smart move to set some ground rules for using the card. That can include setting a spending limit or restrictions on where they can use the card. It can also be helpful to let them know upfront the consequences of misusing the card, which may include confiscating it or removing them from your account entirely.
You can also establish safeguards by setting up notifications so that you know when the authorized user has made a purchase. It's also important to let the authorized user know that if their card is lost or stolen, to let you know right away so that you can request for a replacement from the credit card company.
What are the advantages of having authorized users on a credit card?
It might seem like all the benefits of adding an authorized user go to the person that you’re adding to your card. But there might be something in it for you as well if your authorized user is committed to using the card responsibly.
Here are some of the main advantages for both sides.
Build credit. Adding someone to one of your credit card accounts can help them to establish or improve their credit.
Rack up more rewards. Purchases made by an authorized user can add to your rewards total if you have a card that earns cash back, points or miles.
Plan for emergencies. Authorized users might appreciate having a card that they can use as a safety net for unexpected or emergency expenses.
Teach good habits. They can also learn the basics of how to use credit responsibly so that they’re prepared to do so once they get a credit card of their own.
Streamline budgeting. Sharing a card with an authorized user can help to simplify expense tracking for your household.
A credit card is a useful tool for teaching teens financial responsibility. Adding them as an authorized user to your account gives them a chance to test out their skills before heading into the real world.
How to add or become an authorized user on a credit card
The exact steps you'll need to take to add an authorized user to a credit card can depend on the card issuer. Here's a quick rundown of how it works:
Step 1: Decide who to add
Only you really know if someone is trustworthy enough to be added as an authorized user to your credit card account. Give some thought to who you want to add and why to make sure it’s the right move.
Step 2: Get in touch with your bank
You’ll need to reach out to your bank to add an authorized user. If you bank with BMO, you can visit a branch or call the number on the back of your credit card to add someone to your account
Step 3: Verify their eligibility
Once you get in touch with the bank, you’ll need to confirm that the person you’re hoping to add is eligible. Every bank has its own rules for deciding who can or can’t be added as an authorized user.
Step 4: Share the authorized user’s information
If the person you want to add is eligible, you’ll need to give your bank the information they need to put them on your account. That includes their name, address and date of birth. Your bank may or may not ask for a Social Security number.
Step 5: Wait for the card to arrive
It may take a few days or a few weeks for your authorized user’s card to be delivered. Once the card arrives, you can give it to the authorized user to activate or hold onto it if you don't plan to let them use the card just yet.
It's really that simple. Again, the most important step in adding an authorized user is to discuss your expectations upfront. That way, there can be no room for confusion later about what rights they have — and what responsibilities you'll bear for any purchases they make.
How to remove an authorized user on a credit card
Removing an authorized user is just as easy as adding one. If you have a credit card with BMO, you can visit a branch or call the number on the back of your card to remove an authorized user.
Both the primary account holder and the authorized user can make a removal request. However, only a primary cardholder can add new authorized users to the account.
Does being an authorized user on a credit card impact my credit score or the primary cardholder?
Being an authorized user can affect your credit, as the primary cardholder's account activity may be reflected on your credit report. Assuming that they're using their card responsibly, you should be able to see a positive impact on your credit scores. On the other hand, if they pay late or miss payments altogether, your score could potentially suffer.
Meanwhile, how you use the card could affect the primary cardholder's credit scores in one specific way. For example, things like maxing out your cards can hurt their credit scores—and yours. Payment history and how much of your credit limit you use at any given time may directly affect credit scoring.
If you're spending as an authorized user with no regard to the amount or how much of the primary cardholder's credit limit you're using, that could hurt their credit scores.
Tips for primary cardholders
Before adding an authorized user to a credit card, it helps to look at all angles. While they might benefit in the short term, they could end up doing harm to your good credit history if they're not using the card wisely.
Here are a few final tips to keep in mind when adding an authorized user to your accounts:
Set clear boundaries regarding card usage, including how much they can spend and where they can use the card.
Consider implementing controls on spending limits if your card issuer allows you to do so.
Monitor transactions for the account and consider setting up alerts or notifications so you're aware of new transactions.
Regularly review credit card statements and consider going over them with your authorized user if there are any purchases you have questions about.
Consider how financially responsible the person is that you plan to add, and whether being an authorized user might help or hurt both of you in the long run.
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