Authorized User
Authorized User refers to a person who is added to another individual’s credit card account and is permitted to use the card for purchases, but is not legally responsible for repaying the debt. This is evaluated within Authorized Users.
Plain-Language Meaning
An authorized user is someone who has permission to use a credit card account that belongs to someone else, typically to make purchases, but does not have the obligation to pay the bill.
Practical Example
If you are added as an authorized user to a family member’s credit card, you can use the card for purchases, and the account’s payment history may appear on your credit report, even though you are not responsible for paying the balance.
What It Does Not Mean
This does not mean the authorized user owns the account or is contractually required to pay the debt; the primary account holder remains fully responsible for all charges and payments.
How the System Uses It
The system evaluates authorized user status to determine whether the account’s history should be included in the authorized user’s credit report, which can impact credit scores and creditworthiness assessments.
Common Misconceptions
- “Authorized users are responsible for paying the credit card bill.” Only the primary account holder is legally responsible for repayment.
- “Being an authorized user always improves your credit score.” The effect on credit score depends on the account’s history and the credit bureau’s reporting practices.
- “Authorized users can make changes to the account.” Authorized users typically cannot make account changes or request credit limit increases.
Related Pages
Related Glossary Terms
FAQ
- Can an authorized user be removed from a credit card account? Yes, the primary account holder can request to remove an authorized user at any time by contacting the card issuer.
- Does being an authorized user affect my credit score? It can, depending on whether the card issuer reports authorized user activity to the credit bureaus and the account’s payment history.