Deciding whether to become or to add someone as an authorized user can feel like walking a tightrope between credit-building opportunity and potential financial peril. This comprehensive guide explores the nuances, risks, benefits, and best practices to help you make an informed choice.

What Is an Authorized User?

An authorized user is a person added by the primary cardholder to their credit card account. They receive a card and can make purchases but have no legal obligation to pay the bill. The primary cardholder retains legal responsibility and full control over the account, while the authorized user enjoys certain privileges without direct liability.

Typically, families add children or spouses, or friends trust one another for shared expenses. Authorized users can access most card benefits but cannot request credit line increases, close the account, or add others to it.

How Authorized Users Affect Credit Scores

Depending on issuer reporting, authorized user activity may appear on credit reports, influencing credit scores in both positive and negative ways. Understanding these mechanics is essential before making a decision.

Key Benefits

• Building or improving their credit history for those with limited or no credit profiles.
• Lower the authorized user's credit utilization ratio by sharing a high-limit, low-balance account.
• Rapidly establish a credit footprint when added to an older, well-managed account.
• Access to premium perks, such as travel benefits, purchase protection, and lounge access.
• Educational value for young adults learning responsible spending habits.

Risks and Drawbacks

• Mismanagement by the primary cardholder—missed payments or high balances can damage both parties’ credit.
• Authorized users have no control over account management or reward redemption.
• Some issuers impose fees for adding authorized users, which may offset benefits.
• If the issuer does not report activity, there is no impact on credit—positive or negative.
• Relationship tension can arise if spending expectations and limits are unclear.

Numbers and Real-World Examples

Data from a Federal Reserve study shows an average score change of just 0.49 points for authorized users, with most changes within