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Term: Credit Card Authorized User

25 Sep 2014

DEFINITION OF ‘CREDIT CARD AUTHORIZED USER’

A person who has permission to use and/or carry another person’s credit card, but isn’t legally responsible for paying the bill.

INVESTOPEDIA EXPLAINS ‘CREDIT CARD AUTHORIZED USER’

Generally speaking, an authorized user is a person (usually spouse, domestic partner and/or child(ren)) who is able to make purchases using a credit card without having financial responsibility for the card. Depending on the credit card issuer, an authorized user may have his or her own credit card to carry or simply be authorized to make purchases with the primary account holder’s card.

In most states, credit card issuers do not view an authorized user as the primary person responsible for the entire debt, even if the authorized user is the person who amassed all or most of the charges on the card. However, the credit card’s activity (payment history, credit limit, available balance, etc.) may affect an authorized user’s credit report and be factored into his or her credit score. If negative activity is weighing down an authorized user’s credit score, some credit bureaus, such as Experian, may remove the delinquent information from an authorized user’s credit file (you may have to file a dispute to have this done).

Authorized users can also typically report lost or stolen cards, receive account information (credit limit, available balance, fees, etc.), make payments and initiate billing disputes. Cards generally do not allow authorized users to close an account, add another authorized user, change the address or PIN, or request a change to the credit limit or interest rate. See “Start Building Solid Credit At A Young Age” and “A Smart Approach To Student Credit Cards” for more on being an authorized user. See “Credit Report Alert!” for advice on monitoring your credit.

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