Primary account holders are responsible for card debt


Speaking of Credit
Speaking of Credit columnist Barry Paperno
Barry Paperno is a freelance writer and credit scoring expert with decades of consumer credit industry experience, serving as consumer affairs manager for FICO (formerly Fair Isaac Corp.) and consumer operations manager for Experian. He writes "Speaking of Credit," a weekly reader Q&A column about credit scoring and rebuilding credit, for His writings about credit scoring have appeared in The Huffington Post, MSN Money, CBS Money Watch and other consumer finance websites.
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Question for the expert Dear Speaking of Credit,
Nine years ago we opened up a Home Depot credit card, since we gave them both our information we never thought about who was primary on the account. I am the bill payer and when I called to have one of our payments deferred toward a promotion amount they said they had to speak to the primary. They said that was the law. Is that true, just to make a payment? -- Pattie

Answer Dear Pattie,
Despite you being the bill payer, from what you've described it sounds like there is some question as to your role in the ownership of this account, as Home Depot doesn't seem to see you as a "primary" account holder -- someone responsible for the debt.

When initially applying for the Home Depot card nine years ago, you probably would have done so as either an applicant, co-applicant, or authorized user. And from what you've said about your experience attempting to speak to a customer service representative about payments on the account, whether realizing it or not at the time, you appear to have applied initially as an authorized user. What's the difference between primary and authorized user?

For most consumers, there are two major roles that can be played in the sharing of a card account, with the main difference being that one includes responsibility for the debt while the other doesn't. These two roles go by many names, such as primary, applicant, co-applicant and authorized user, with, interestingly, no uniformly consistent set of terms used by card issuers to describe these two major ways in which credit accounts are shared.

The following are some examples of common cardholder roles and their meanings:

Role of cardholder in shared account Level of account access and responsibility

Individual, primary, joint, applicant, co-applicant, borrower, co-borrower

In addition to responsibility for all debt incurred on the account, this role includes full access to account information and the ability to make account changes.

Authorized user, secondary account holder

This role, in which the user is not responsible for the debt, can only be granted by the primary cardholder. The details can vary between card issuers, but generally allow some account management functions, such as the ability to make payments and request statements.

If you're wondering how, in addition to responsibility for the debt, these two types of account ownership affect your credit score, fortunately, as long as you have a Home Depot card with your name on it, the entire history associated with that account has probably been appearing on your credit report and contributing -- hopefully in a positive manner -- to your credit scores.

And no, it's not true that only the primary cardholder can make a payment on a Home Depot card account. According to Home Depot's website, authorized users can make payments, obtain some account information, report cards lost or stolen, and initiate billing disputes, among other actions. What a Home Depot authorized user cannot do is close the account, add another authorized user, request a lower APR or change the billing date.

As for the law determining that the representative helping you could only speak with a primary account holder, the Credit CARD Act of 2009 and Truth in Lending Act are just two of the various laws that protect consumers from credit account dangers. If not stated specifically, the interpretation within the credit industry appears to be that certain account information can only be shared or significant account changes made at the request of a cardholder contractually liable for the debt -- not an authorized user.

In your situation, if, rather than simply making a payment, you were attempting to have a payment allocated in a particular way among deferred and non-deferred balances or balances with different APRs, the Credit CARD Act may have come into play. This law determines how, in some instances, payments are to be applied among deferred and non-deferred balances and different APRs within the same account. As such, your payment allocation request may have either been 1) something they were unable to provide and could not discuss further with you, or 2) were able to provide, but only at the request of a primary cardholder.

While the Home Depot representative's refusal to discuss the account with you or make your requested changes was understandably an annoyance and inconvenience at the time, no doubt you can appreciate that such privacy and control rules work to protect consumers from fraudulent and abusive actions by others.

So, what can you, the bill payer, do to avoid such frustration in the future?

First, to get the best understanding of your true relationship to the card, check at least one of your credit reports for the "ECOA code" on the Home Depot trade line. It should state that the card is held either individually, jointly or as an authorized user (often designated by the letter I, J or A). Then, if it turns out to be, as I suspect, that you are an authorized user, you can either:

  1. Have the person responsible for the card contact Home Depot with a request to add you as a joint/co-applicant account holder, or
  2. Apply for your own Home Depot account as an individual account holder, where you will have all of the "primary" rights and responsibilities associated with the account, including the ability to add someone else as an authorized user.

See related: Co-signer, guarantor, co-applicant, and more: Know your status as a borrower, In deferred-interest deals, banks can decide payment allocation

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Published: February 4, 2016

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Updated: 10-24-2016

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