Drawbacks of Being an Authorized Credit Card User

If you can’t get approved for your own credit card, you might ask a parent or relative to add you as an authorized user on their credit card. Being an authorized user lets you get many benefits of having a credit card without having to apply for a credit card. You can get a credit card with your name on it, make charges on the credit card, and even have the credit card history added to your credit report. Unfortunately, there is a downside to being an authorized user on someone else’s credit card.

Authorized User Impact on Credit Scores

When you’re an authorized user, your credit score will be affected by the primary cardholder’s credit card usage. When that cardholder is responsible – pays their bills on time and doesn’t maintain a high balance – your credit score benefits from being an authorized user. However, if your primary cardholder is not responsible in his or her credit card usage, your credit score will suffer the consequences.

Remember that payment history is 35% of your credit score. If you’re an authorized user on an account that doesn’t have a great payment history, your credit score will take a hit. A single 30-day late payment won’t do much damage, but 90+ days late or worse, a charge-off, can devastate your credit score.

High credit card balances will also bring down your credit score, since level of debt is 30% of your credit score, but the damage will be short-lived if the balance is paid down. When you’re sharing a credit card with someone else, high balances are hard to avoid since two people are using the same credit card. Communication is the key to keeping credit card balances in check. You can also call to check the current credit card balance before making a new purchase to confirm there’s enough available credit.

Keep an Eye on Your Credit Card

It pays to keep a close eye on the credit card’s activity, even though you’re just an authorized user, since the shared credit card will affect your credit, too. Check the online account statement to verify the current balance and payment status. But if you can’t do that, you can check both those things using the credit card’s automated customer service number found on the back of the credit card. When neither of those works, check your credit report to find out about any misuse of the credit card.

How to Remove Yourself as an Authorized User

To remove yourself as an authorized user, call the credit card’s customer service department. You can also request that they remove the account from your credit report as well. Otherwise, the account may stay on your credit report. The credit report dispute process is another way to get authorized user accounts removed from your credit report. Just dispute the account stating that the account doesn’t belong to you.

Authorized user accounts are often encouraged as a way to begin building your credit history or to get positive information on an otherwise negative credit report. However, the downside of being an authorized user shouldn’t be ignored.