Updated: May 01, 2023

Authorized User vs. Joint Credit Card Account Holder: Which is Better?

When you're in your 30s, you might finally be in a position to help someone out financially. But when sharing a credit card, understand the risks.
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Have you considered adding your soon-to-be spouse or a partner to your credit card account?

Thought about adding an authorized user on your account to help your someone out?

Ever lent your credit card to a friend or loved one? Credit card sharing happens every day, but if you’re not careful, you might end up paying for your generosity.

There are many legitimate reasons why you might share your credit card with someone else.

Maybe you want to help a young loved one build a good credit profile. Perhaps you’re getting married and merging your finances.

Or you might just be a really friendly person. Whatever your reasons for sharing a credit card with someone else, it’s important to understand the financial consequences of that decision.

There are two ways you can add someone to your credit card account.

One is as a joint account holder, and the other is as an authorized user. Both of these moves will allow people on the card to use the plastic, but there will only be one limit and one payment you have to make.

Each person’s individual charges will affect the balance.

So if your partner decides to spend $5,000 with the card, that amount will be reported on credit reports for both the primary cardholder and the authorized or joint user, regardless of who made the charges.

Credit card sharing is something people of all ages will have to face, but it’s particularly pertinent for folks in their late 20s and early 30s.

As you tie the knot, consider buying a home, or start a family, credit card sharing will be something you might encounter.

That’s why understanding your legal obligations for sharing your credit card is so important.

Authorized user vs. joint account holder

When you add someone as an authorized user on your credit card, you give them permission to use the card.

Adding someone as an authorized user to a credit card account might help him or her build credit (if your bill's paid on time and your account has a low balance) because that person essentially piggybacks on your credit.

The payment history will appear on the authorized user’s credit report, which is beneficial if it’s good. You don’t have to go through a credit check in order to be added as an authorized user for a credit credit.

Sharing a credit card via a joint account is something married couples might consider because it streamlines the bill-paying process.

Unlike adding someone to your credit card as an authorized user, however, a joint account holder has as much legal responsibility to pay off a card balance as the primary cardholder.

A joint account holder usually has to meet certain credit requirements in order to be added to the account.

The big difference between an authorized user and a joint account holder lies in liability. An authorized user does not have a legal obligation to pay back debt on the credit card while a joint account holder does. Understanding the difference between the two will help you decide whether you should share your credit card with anyone.

Prevent card sharing woes

Sharing a credit card is always risky because the truth is you never know what people might do or what secrets they could have -- yes, even loved ones.

In your 30s you might just be starting to stabilize your finances.

You might be thinking about your future and starting a family or buying a home.

You can really mess things up if you carelessly allow others to use your credit as either an authorized user or joint account holder. That said, you can minimize the damage by understanding what you’re liable for and protecting yourself.

If you’re considering adding someone to your credit card as an authorized user, there are steps you can take to protect yourself. Some credit card issuers allow primary cardholders to set a spending limit on an authorized user.

Setting a limit will help you protect your credit history if you are adding, say, your teenage brother or a sister who has bad spending habits.

Also, remember that you can easily remove an authorized user from a credit card, but remember that you will be liable to pay for any charges they make as long as they are listed under the account.

When your teenager brother or big-spending sister are finally ready to stand on their own financially, note that some banks may completely wipe out the authorized user account.

It might be worthwhile for the authorized user to open their own credit card account before they have lost access to the old credit line.

If you end a joint account with someone because, say, your relationship ends, things can get a bit tricky.

You can easily remove someone from a joint account, but there could be a snafu if there’s a balance on the card.

The two parties will have to come up with a solution about who will pay the balance so that you can get rid of the account.

If your jilted ex doesn’t pay his or her share of the bill, your credit could suffer.

Even if your relationship doesn’t end, credit card disagreements might arise from sharing a joint account. Keep that in mind before you decide to merge your finances with your partner.

To successfully manage a joint credit card account, here are a few tips: set a maximum balance, check in with your partner before making a big purchase (say over $200), let the other person know when you’ve made purchases, establish who will pay the bills and how, and understand your partner’s spending habits.

Is sharing a credit card ever OK?

Beyond adding someone to your account as an authorized or joint user, you might also encounter situations where you share your card with someone else.

Maybe you give your card number to a relative to a friend so they can buy something online or lend your card to your younger sibling so they can purchase an item.

While it might seem like a fairly innocuous thing to do, sharing your credit card with someone means you will be liable for the charges your loved one makes.

When you willingly agree to let someone use your credit card -- unauthorized use is fraud, and you should report that to the proper authorities -- you’re liable for any charges they make.

That’s worth repeating: you are responsible for all charges made to the credit card if you voluntarily lend it to someone.

In many instances, your loved one will borrow your credit card and purchase the items they said they would. But abuses do happen.

The person, particularly if your loved one is a teen, might be careless with your card and you could end up a victim of identity theft. He or she might even get flagged for fraud if the merchant is suspicious that they are not the cardholder.

Before you think about loaning your card to someone, consider other alternatives. Give him or her a reloadable prepaid card, add your loved one as an authorized user, or better yet, make a quick trip to the ATM and get cash.

Whether you share your card by adding an authorized user to your account, opening up a joint account, or loaning out your card, be aware of the risks involved as the primary cardholder.

In your 30s, it’s likely that you will be racking up some debt -- maybe you have a wedding to pay for or a house that needs repair.

The last thing you want to do is allow your debt to snowball to the point that it’s unmanageable. Only add authorized users to your account or become joint holders with someone you trust.

And be cautious about lending your card to a loved one, make the purchase yourself if you have to. Don’t let credit card sharing ruin your finances.