Setting unique spending limits for authorized users makes a lot of sense, but not enough cards offer this functionality. Find out which ones do and how to take advantage.
Adding authorized users to your credit card can make sense in several scenarios, whether you want to help your teenager build credit or you need to manage and oversee employee purchases for your small business. Because you are completely liable for all authorized user spending, however, establishing limits for their purchases can be a smart move.
By setting different credit limits for multiple users on a personal card, you can prevent your kids from making purchases over a specific limit, or from charging more than you agreed to upfront.
With employee cards, on the other hand, setting limits can help prevent fraud or situations in which employees are charging more than you’re comfortable with. At the same time, you get the benefit of tracking your employee purchases in one place, and you can earn rewards on their spending.
How to manage authorized-user spending
When you add an authorized user to your credit card account, it’s important to note that they will get their own credit card with their own name on it. Your authorized user will also be able to make payments on the card if they want to, but you will be the one who is legally responsible for all of their charges.
Fortunately, credit cards that allow authorized users will typically list all authorized user purchases separately on your credit card bill. This makes it considerably easier for primary cardholders to see which user made which charges, as well as how much they spent.
Before you set up an authorized user on your personal or small business credit card, you should think about what you hope to accomplish. You may have completely different goals when adding an authorized user to your personal card than you would with a business credit card, and that’s perfectly understandable.
Here are some tips to help you manage authorized user spending successfully in either case:
- Communicate your authorized user’s spending limit upfront. Whether your credit card lets you set up spending limits for authorized users or not, you can still communicate a limit with the person who is receiving their own card. Doing so can help establish clear boundaries for spending, which can help prevent problems before they arise.
- Set up alerts on your account. Many credit cards let you set up alerts when purchases are made, or when purchases are made over a certain amount. Setting up these alerts can help you find out right away when authorized user spending occurs.
- Regularly review your credit card statement. While finding out about purchases after the fact won’t help prevent overspending, you should still look over your credit card statements every month. This can help you make sure you are comfortable with authorized user purchases being made. You may also be able to spot patterns or instances where cards weren’t used according to plan.
Credit cards that allow you to manage authorized spending
It would be nice if all credit cards let you set up different credit limits for individual authorized users. After all, you may not want a limit for your spouse, but adding limits for a teenager added to your account could save you all sorts of trouble.
Unfortunately, not all credit card issuers allow this functionality. In fact, American Express is the only card issuer that lets cardholders set limits for authorized spending on all their consumer cards. Small business credit cards are another exception since most card issuers let their customers set limits on employee cards.
Consumer credit cards
When it comes to consumer credit cards, American Express is your best bet by far. The exception is the Costco Anywhere Visa® Card by Citi, which is a lone Citi credit card that lets users set limits on authorized user spending.
While there are American Express credit cards that let you set limits on authorized users are broad and varied, here are a few of our top picks:
Blue Cash Preferred Card from American Express
The Blue Cash Preferred® Card from American Express is an excellent rewards credit card for families since it offers bonus rewards in several everyday spending categories. Specifically, cardholders can earn 6% cash back on up to $6,000 spent at U.S. supermarkets each year (then 1% back), 6% back on select U.S. streaming services, 3% cash back on U.S. gas station purchases and transit and 1% back on all other purchases. New cardholders can also earn a $350 statement credit welcome offer after spending $3,000 on purchases within six months of account opening. A $95 annual fee applies.
American Express Gold Card
The American Express® Gold Card lets cardholders earn 4X American Express Membership Rewards points on dining worldwide, 4X points on up to $25,000 in spending at U.S. supermarkets each year (then 1X points), 3X points on flights booked with airlines or with AmexTravel.com and 1X points on other purchases. New cardholders can also earn 60,000 Membership Rewards points after spending $4,000 on purchases within six months of account opening. Several perks come with this offer, including up to $120 in Uber Cash each year and up to $120 in annual dining credits. A $250 annual fee applies.
Blue Cash Everyday Card from American Express
The Blue Cash Everyday® Card from American Express offers 3% cash back on up to $6,000 spent at U.S. supermarkets each year (then 1% back), 3% cash back at U.S. gas stations (on up to $6,000 per year in purchases, then 1%), 3% cash back on U.S. online retail purchases (on up to $6,000 per year in purchases, then 1%) 1% back on other purchases. New cardholders can also earn a $200 welcome bonus after spending $2,000 on purchases in the first six months of account opening. This card doesn’t charge an annual fee.
Business credit cards
When it comes to business credit cards that let primary cardholders set spending limits on employees, pretty much any card is on the table. In fact, most major card issuers offer this function on their business cards, including the following:
- American Express
- Bank of America
- Capital One
Our top picks for business credit cards that allow spending limits on employee cards include:
American Express Blue Business Cash Card
The American Express Blue Business Cash™ Card offers 2% cash back on up to $50,000 in purchases each year, after which cardholders earn 1% back for each dollar they spend. There’s no annual fee, and it comes with a 0% intro APR on purchases for the first 12 months (a variable APR of 16.24% to 24.24% applies thereafter). New customers can also earn a $250 statement credit after making $3,000 in purchases within three months of account opening.
Ink Business Unlimited Credit Card
The Ink Business Unlimited® Credit Card offers a flat 1.5% cash back for each dollar spent, and new cardholders can earn a $750 cash bonus after spending $7,500 on purchases within three months of account opening. An intro APR of 0% on purchases also applies for the first 12 months, after which cardholders pay a variable APR of 15.49% to 21.49%. This business credit card doesn’t charge an annual fee.
Capital One Spark Cash Select
The Capital One Spark Cash Select also offers a flat 1.5% cash back for each dollar spent, and there is no annual fee. New customers can also earn $500 in bonus cash after spending $4,500 on purchases within three months of account opening. The good news on this flat-rate cash back card: You don’t need to enroll in any categories to begin earning cash back, and there’s no limit to how much cash back you can earn.
Setting up unique spending limits for authorized users can help prevent major headaches as well as fraud in some cases. This is true when you’re adding a dependent to your card in order to help them build credit, but it’s also true when you set up employee cards to make their purchases more convenient. That said, you should compare credit cards that offer this option carefully, and don’t settle until you find the right fit.