Will it hurt my son's credit if I cancel him as an authorized user?
Erica Sandberg is a prominent personal finance authority and author of “Expecting Money: The Essential Financial Plan for New and Growing Families.” She writes “Opening Credits,” a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.
I added my son as an authorized user to my card, but want to cancel it before the annual fee hits. How will that affect his credit?Once authorized user status is revoked, any credit reporting activity associated with that credit card disappears from your son’s credit reports. Since young adults have shorter credit histories, the impact will be greater than it would be for someone who has been managing credit for many years.
Dear Opening Credits,
I added my son as an authorized user to my Barclaycard Arrival Plus World Elite Mastercard because he is studying abroad and the card charges no foreign transaction fees. Originally, I intended to cancel the card before the annual fee hit, but I’m concerned canceling might have a negative impact on his credit. (I have an 800-plus credit score, so the impact to me would be negligible). Can you let me know if canceling this card would hurt his credit? – Paul
Yes, if you canceled the credit card that your son is authorized to use, the credit card issuer would stop sending information about the card payments to his consumer credit reports. Once that card information is gone, the boost that account had been giving his credit history would cease. And since young adults tend to have shorter credit histories, that impact will be greater than it would be for someone like you, who has been managing credit cards for a long time. If this is your son's only credit card, canceling the card will wipe out his already brief fling with credit, so consider all your options before canceling the card.
Tip: If you have a child as an authorized user on one of your cards, and if that child has some type of income and is over the age of 18, you may want to encourage your son or daughter to open up their own card before removing them from your card.
Because credit scores are developed from the data that appears on a person’s credit report, your son’s credit scores would revert to what they had been had he never had access to the account.
As noted, your excellent credit scores may not experience a massive change if you close the credit card. Canceling the account might shorten the overall length of your credit history, and if you owe any money on other cards, eliminating a credit line will increase your credit utilization ratio.
However, if you’re debt-free, your scores should still be in the upper tier. Also, assuming you always kept the account in good standing by paying on time, the history of that account will remain on your credit reports for up to 10 years.
If your son has an income, I would suggest he apply for a credit card in his own name before you remove him as an authorized user, while your Barclaycard is still giving his credit scores an upward nudge. A greater variety of credit cards will be available to him at this point, so it would be a smart time to apply. CreditCard.com's CardMatch program is a seamless way to identify which accounts are within reach, without him having to apply and then potentially get rejected (which will hurt his stores with the excess hard inquiries).
Of course, he can still pursue credit cards when your account is no longer on his credit reports, but with the boost this card is giving his credit, he will have more options now.
I do want to point out that you may not want to cancel the Barclaycard until you have contacted them. The company may agree to waive the annual fee.
Call and explain that you’re considering closing the card because you don’t want to pay the upcoming fee. Most credit card issuers will work with valuable cardholders to keep them happy, active users, so may consent on the spot. They may even throw in some extra rewards points or other perks to sweeten the deal.
It doesn’t hurt to ask and you may be surprised how flexible and generous a credit issuer can be. If you accept and want to keep your son on as an authorized user, he would continue to enjoy the credit scoring advantage that you are so graciously giving.
Since the card you have is no longer being offered to new customers and has been replaced with the much-lower annual fee ($150) Barclays Arrival Premier World Elite Mastercard, you may want to ask the issuer to switch you and your son to the new card until he is ready to apply for a new card on his own. You can also use this site to compare cards with no annual fee.
If you are not successful in getting the annual fee waived or don't want another card, go ahead and close the credit card and move on. This is your life and you are under no obligation to maintain an unwanted credit card. Your son will be fine, too, especially if you teach him how to manage whatever credit product he does get in the future. With a credit score so high, clearly, you’re the expert!
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