Should I split the cost of a pricey rewards credit card with a relative?
Sharing the price of a high annual-fee card can be smart – if you trust the person you'll share the card with
Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.
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Should I split the cost of a pricey rewards card with a relative and add them as an authorized user?
Sharing the cost of a high-end rewards credit card with a steep annual fee with a relative can be a sensible strategy.
However, you must consider that by adding that person to the card as an authorized user, you will be responsible for any purchases they make.
Make sure you trust the financial habits of the person you'll be sharing the card with first.
Dear Cashing In,
I am considering opening a Citi American Airlines AAdvantage Executive card for the Admirals Club access. My aunt agreed to split the annual fee if she can be an authorized user. I love my aunt, but trusting her is another story.
I initially thought I would just keep the card, but she has to have the physical card to access the lounge. Is there any way to restrict her ability to actually make purchases? – Tanasha
Splitting the cost of a high-dollar credit card with a family member might sound as though it would make some sense – although it comes with some risks you should consider first, as we'll see.
See related: When an authorized user goes rogue: What to do
Pros of sharing a high-end rewards card with an authorized user
The Citi / AAdvantage American Airlines Executive Mastercard has a steep $450 annual fee, and the main perk, as you note, is the lounge access.
Adding an authorized user could be a sensible idea. Some high-fee rewards cards charge for adding an authorized user, too, but with the AAdvantage Executive card there is no additional annual fee.
- All you have to do is go online or call and give Citi the Social Security number, date of birth, and full name of the person you are adding.
- That person is then issued an additional card in his or her name, and that card grants access to the more than 50 Admirals Clubs around the world.
- You can also use the card to bring in members of your immediate family (spouse and minor children) or two non-family guests.
The authorized user card doesn’t have quite the same privileges as the primary cardholder, because it won’t get them into affiliated but non-American Airlines lounges, and it won’t let them receive discounts on renting conference rooms, either. But those are minor perks you or your aunt probably weren’t going to use anyway.
However, as you note, the main drawback of adding an authorized user is that you, as the primary cardholder, are responsible for any purchases that person makes.
If that person is financially irresponsible, that can amount to a huge problem since you are on the hook to pay the bill for both cards each month.
Tip: The Citi / AAdvantage American Airlines Executive Mastercard offers access to 50 Admiral Club Lounges, but if you're looking for a card that offers access to lounges from a different network, you have options, including Chase Sapphire Reserve, The Platinum Card® from American Express and United MileagePlus Club card. Read "Best credit cards for airport lounge access" to learn more.
Reining in an authorized user’s spending
Some cards do allow you to limit the credit line of the authorized user card separate from the primary account. American Express cards typically offer that option, as well as the Costco Anywhere Visa Card by Citi.
Unfortunately, the Citi AAdvantage Executive card does not. The credit line on a personal account covers both the primary and authorized-user cards.
If you are able to qualify for a business version of the card, which you can usually do if you have at least a side gig or a hobby that you can use to justify such an application, then you are able to set separate credit limits for an authorized user.
When adding an authorized user, caution is advised
In the case of your aunt, it sounds as though you should proceed with caution.
Airport lounges are a nice perk. They allow you to eat and drink at the airport without spending money, and they are comfortable places to relax before a flight away from airport crowds.
But they are not worth the cost of having a relative run up hundreds of dollars of charges on your account, both because of the expense and because of the tension it would create with your aunt.
Like co-signing on a loan, it’s unwise to comingle your finances with somebody who is financially disorganized or impulsive.
It might be better to look into getting the card on your own and deciding whether the full $450 annual fee is worth it.
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