Adding an authorized user can allow you to earn rewards or even a bonus while helping family or a friend build their credit.
An authorized user is someone you add to your credit card account to give them authorization to use it.
That person gets a separate credit card and can charge it and use some of the benefits available to the primary cardholder. However, the primary cardholder is responsible for paying the bill.
The advantages of being an authorized user are mostly clear. Authorized users get access to credit, can improve their scores and even enjoy some of the same perks the primary cardholder gets.
Still, the primary cardholder can benefit from adding an authorized user as well. Allowing another person to use your account will help you earn rewards faster – and sometimes even get you a bonus.
Benefits of adding an authorized user
Having an authorized user on a credit card account can benefit both the primary cardholder and the person added to the account.
- It’s a convenient way to take care of your family members. For example, you can add your child to your credit card account to make sure they always have access to funds. You’ll be able to track their spending and manage expenses, as well as let them learn to use a credit card responsibly.
- It’s safer than a joint account. If you’d like to share your account with your significant other or friend, adding them as an authorized user is a safer choice. It’s easier to remove an authorized user than to figure out who’s responsible for debt on a joint credit card account if the relationship goes sour.
- It can help you to earn rewards faster. Any purchases your authorized user makes earn miles and points in your account. This can allow you to earn rewards quicker, as well as meet the minimum spending requirement for an intro bonus.
- It can offer you a chance to get a bonus for adding an authorized user. Credit card issuers sometimes offer limited-time promotions giving cardholders a bonus for adding an authorized user.
See related: When should you get your child a credit card?
Cards that offer a bonus for adding an authorized user
If you’re considering adding an authorized user to your credit card account, check the offers below to see if you’re eligible for a bonus:
- Earn up to 5,000 Flying Club bonus miles when you add additional authorized users to your Virgin Atlantic World Elite Mastercard®.
- Earn up to 2,500 bonus miles when you add an authorized user to your United℠ Explorer Card with this targeted offer.
Other credit cards might send out targeted offers for a bonus as well. American Express is known for doing that often. For example, in May 2020 the issuer sent out offers for The Platinum Card® from American Express giving 5,000 points per authorized user added, according to Doctor of Credit.
Should you add an authorized user to your credit card?
While there are certain benefits to adding an authorized user or your credit card account, remember to consider the risks as well. Make sure you can trust the person you’re thinking of adding because their credit card usage can affect your credit.
For example, if the authorized user makes substantial charges pushing the card’s balance close to its limit, your credit utilization ratio will increase. Since it’s an incredibly important credit score factor and having a ratio of over 30% can hurt your credit, your authorized user’s spending behavior can cost you credit score points.
On top of that, if your authorized user agreed to pay for their charges and then didn’t, you’re still responsible for taking care of the bill. In the worst-case scenario, you may end up with large amounts of debt you’re legally required to pay.
Finally, such events can strain your relationship with the authorized user. Money matters are always a sensitive topic, so make sure they won’t become an issue if you add a user to your credit card account.
Adding an authorized user to a credit card account can be beneficial for both the authorized user and the primary cardholder. When you add someone to your credit card account, you’re helping them build credit in a safe way while earning rewards faster. And certain cards can offer a bonus for adding an authorized user.
However, make sure you can trust the person you’re adding to your account to avoid being left with credit damage or significant debt.