Do Authorized Users Benefit?

When you open up a credit card account, you have the option of adding authorized users to that account. Authorized users are allowed to use the credit card at will, and can share some of the benefits credit card customers may receive. While becoming an authorized user on someone else’s credit card may sound like a great idea, there are also many drawbacks to having that power.

One of the most common examples of authorized users is parents adding their teenage children to their accounts. This gives their children the ability to spend with that credit card, along with beginning to build a credit report. As their children would be unable to truly build their credit score otherwise and therefore not be eligible to apply for a credit card, this is an easy process where parents can pay their bills regularly, but truly help others besides themselves in the long run.

Unfortunately, being an authorized user on another’s account can cause serious problems and damage to your credit score as well. If the person whose account you are authorized to use is habitually late on paying their bills or is not in control of their personal finances and spending uncontrollably, this can consequently hurt your credit score. Just a few late bill payments can drop your credit score like a stone, and it takes much more work to get out of that hole.

While being an authorized user can damage your credit score effectively, it does not put you in charge of the account and the charges made to it. If debt collector attempt to communicate you and place responsibility upon you, refuse to make payments and send them a signed letter stating you are only an authorized user of the account and do not have a joint account. Also, if your credit score has been affected negatively because of being an authorized user, attempt to get rid of the account completely from your record. Sometimes this is a viable option in an attempt to save your credit score.

Overall, while it may be beneficial for newcomers to easily build a credit score, it is usually smarter to not become an authorized user of credit card accounts, as they usually lead to more harm than good. If you are going to be entering as an authorized user, make sure the account holder is stable financially and trustworthy to make on-time payments.

Jonathan Boral

Jonathan Boral

Jonathan Boral, a junior at the University of North Carolina’s Kenan-Flagler Business School, grew up in Charlotte, North Carolina an avid fan of film, television, and music. He has spent many hours finding the delicate balance between his love for acting, business, and the entertainment industry. Through his school career, he has appeared in several different shows, including the musical Annie and Laughter on the 23rd Floor. Not only as an actor, but he has also been able to see the production side of shows as the Stage Manager for Oh Dad, Poor Dad, Momma’s Hung You in the Closet and I’m Feeling So Sad. Constantly finding new ways to study the business and production aspects of film and television, he has spent time researching box office returns and film production values, in hopes to one day writing for an entertainment journal, or working as a film producer or talent agent. He plans on further pursuing his knowledge of the business world by becoming an active member of the Marketing and Entrepreneurship Clubs at Kenan-Flagler Business School.

Currently at UNC, Jonathan has received numerous honors. Most highly is his position as the Vice President of the Omega chapter of Alpha Epsilon Pi, North America’s largest Jewish Fraternity. Along with this leadership position, he has been nominated for many achievements, including the National Society of Collegiate Scholars, the Leadership Advantage Program, the National Society of Leadership and Success, along with being on UNC’s Dean’s List for multiple semesters.

Now residing in Chapel Hill, he hopes to use his articles as an outlet for further business and financial knowledge, along with connecting to his readers with his youthful perspective. In his free time, he enjoys watching all types of films, playing with his dog Hutch (a chow mix), and spending time with family and friends.
Jonathan Boral

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