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News: How To Add An Authorized User To A Credit Card -

Whether you want your child to start building credit, care for older parents, or merge finances with a partner, adding an authorized user to your credit card is convenient and does not require much effort. Authorized users receive their own card with their name on it, but the card is tied to your account, meaning it belongs to you as a primary cardholder.

The major advantage for authorized users is benefiting from good credit habits of the primary cardholder as on-time payments and credit utilization may be reflected on the authorized user's credit report. However, not all issuers report an authorized user's activity to the three major credit bureaus. So if credit building is the main goal, check with your issuer if they report this information.

Another advantage of being an authorized user is convenience - the authorized user will always have access to the money they need, no need to borrow a card or deal with money transfers.

However, with advantages come disadvantages, which are mostly for primary cardholders. When you have an authorized user who have unlimited access to your credit limit, it will be easier to overspend. Going over your credit limit means penalties in the form of fees and interest. Also, if your authorized user spends too much, it may be hard to pay off your card or keep the credit utilization low, which may negatively affect your credit score (and the score of the authorized user as well). Keep in mind that authorized users are not legally responsible for the expenses, fees, and interest payments, but primary users are.

After you've weighed all pros and cons of adding an authorized user to your credit card, you can start the process. First of all, you need to contact your credit card issuer to see whether you can add an authorized user, the minimum age of such a user, if there are any fees, and if you can do it online or by calling the customer support.

Then you will need to fill out a form by providing the yet-to-be authorized user's name, date of birth, Social Security number, and address. Once it's done, your issuer will send you a new card for the authorized user.