The Authorized User

By David Pilley on July 8, 2010

In the world of credit cards, numerous questions are out there. Before you decide to get one, ask questions and do research. Should I get a MasterCard or a Visa? What is my credit score? For what purpose will it be used?

One of the most important questions to ask is who can use the card. If you are going to pay the bill, then you obviously have control over its use. But what if you are crazy enough to allow someone else to use it without having to pay the bill?

Now, I’m not here to judge your sanity if you get a credit card. However, there are certainly some consequences in getting one. One of those possible consequences is the addition of an authorized user, or someone who has permission to use the card without having the responsibility of paying the bill.

If you decide to add an authorized user to your account, you should add only someone you can trust. Parents will often add children going to college as an authorized user to a credit card for emergency purposes (such as buying a textbook or a late night study break meal). If you can trust the person in not overspending, then you can make him/her an authorized user. But, if you want to be in control of who uses the card, you might not want to add any.

Using a credit card affects your credit score. If the card is being used properly (no frivolous purchases and a low balance), your credit score will be in good condition for the cardholder and for the authorized user. In fact, adding a child as an authorized user is a good way to introduce him/her to the world of credit and establish a good credit line. Of course, the reverse is also possible. If dues are not paid back on time and a hefty balance gets built up on the card, it will hurt both the cardholder and the authorized user, possibly resulting in bad credit for both.

The glossary of credit.com is a good source highlighting credit card key words, including the authorized user. Again, it is up to you to decide if you want to add an authorized user to your credit card. As long as you are responsible in paying the dues and as long as the person designated as an authorized user does not make purchases on a whim, your credibility will be in good standing.