Understanding Authorized Credit Card Users: Benefits and Risks

Adding an authorized user to your credit card account can offer advantages like meeting spending requirements, earning more rewards, and helping someone build credit. However, it's crucial to consider the potential risks and choose a responsible individual.

What is an Authorized User?

An authorized user is someone added to a primary credit card holder's account who receives a card with their name on it, linked to the primary account. They can then make purchases as if they had their own card.

Benefits of Adding Authorized Users

Adding authorized users can benefit both the primary cardholder and the authorized user. It can help meet spending requirements, establish credit history, and leverage card benefits.

Many credit card issuers offer perks for authorized cardholders. For example, the Citi® / AAdvantage® Executive World Elite Mastercard® allows adding up to three authorized users for $175 each, granting them access to Admirals Club lounges when flying American Airlines or its partners with a same-day boarding pass (though access is more limited than a full membership).

Chase cardholders can transfer Ultimate Rewards points to authorized users' loyalty program accounts, avoiding transfer fees that United Airlines might charge. American Express Platinum Card® offers authorized users benefits like lounge access, elite status with Marriott Bonvoy and Hilton Honors, for a $195 fee per user. Some American Express cards also offer bonus Membership Rewards points for adding authorized users.

Risks of Adding Authorized Users

The primary risk is adding someone who may not be responsible with credit. Even though they aren't legally obligated to repay debts, their spending impacts the primary cardholder's credit score and account.