By Dan Miller 26. May 2023 · 7 read minute
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You may have several options when you search for itopen a credit cardhas another person. A joint account holder and an authorized user are two different ways two people can share the same account. However, there are some important differences to keep in mind.
By adding an Authorized User to your account, the Authorized User can take advantage of your account's good credit and payment history. This can be a strategy to help a trusted friend or family member improve their credit score. However, with a joint credit card account, both individuals apply at the same time, and both account holders are legally responsible for all purchases and debts on the account, regardless of who makes the purchase.
Read on for more on this topic, including:
• What is an authorized credit card user?
• What is a joint credit card holder?
• What to do before adding an authorized user?
• What should be considered before opening a joint credit card account?
• How do you know if an authorized or shared user credit card is right for you?
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What is an eligible credit card user?
An authorized user of a credit card, sometimes referred to asadditional credit cardan additional user has been added to the primary cardholder's account. The authorized user gets their own physical card and can make purchases. The authorized user can benefit from good credit or a positive payment history on the account; can help them build or maintain their credit rating. However, you are not responsible for purchases or debts.
How an authorized user affects your credit score
There are manyFactors affecting solvency, but adding an authorized user to your account is not one of them. Adding an authorized user to your account will not check your balance and should not have an immediate impact on your balance. Please note, however, that you are responsible for all purchases made by authorized users. So if your authorized user spends more than expected and has trouble making the full monthly payment, it could hurt their credit score.
Things to keep in mind when adding an authorized user to your account
Here's a quick overview of some things to keep in mind when adding an authorized user to your account:
| risks | Price |
|---|---|
| You are legally responsible for all purchases made by an authorized user | When used responsibly, it can help build or maintain an authorized user's balance |
| Incorrect usage can affect your credit score | Extra spending can lead to extra credit card rewards |
| The primary cardholder can remove the authorized user from the account at any time |
Recommended:How many credit cards should I have?
What is a joint credit card account holder?
Unlike adding an authorized user to your account, you usually get onejoint credit cardapply with someone else. In the case of a joint credit card, the creditworthiness of both potential cardholders is evaluated and used to determine eligibility. If approved, both cardholders are equally and separately responsible for all debts and purchases on the account, regardless of who actually made the purchase.
How a joint account affects your credit score
When applying for a joint account, the creditworthiness of both persons is verified and, if necessary, approval is given to receive a card. This usually shows up as a new request on each prospective account holder's credit report, which can temporarily lower one's credit score by a few points. Also, both joint cardholders are responsible for all debts, regardless of who they actually are.use credit card. So if one person spends more than expected or struggles to pay the bill on time, it could negatively affect the creditworthiness of both cardholders.
Things to consider before opening a joint credit card account
Here's a quick rundown of a few things to consider before opening a joint credit card account:
| risks | Price |
|---|---|
| Many major publishers do not allow joint accounts | The extra spending of two people can result in higher credit card rewards |
| It is not possible to remove an individual from the joint account without closing the entire account | When used responsibly, it can help establish or maintain the creditworthiness of both cardholders. |
| Things can get complicated if the relationship between the joint cardholders changes (e.g. divorce) |
Joint credit card account holder versus authorized user
Consider the differences between these two similarities:
• A joint credit card account is one where two people open and use the account together, and both persons are equally responsible for all debts.
• There is an important difference between an authorized user and a shared credit card: the authorized user is not responsible for any purchase; instead, the primary cardholder is responsible for all charges.
• If the primary cardholder already has a good credit history and continues to use the account responsibly, becoming an authorized user may be an opportunity to help you determine creditworthiness.
Recommended:What is the minimum age to be an authorized credit card user?
Choose the right option
A joint credit card account generally only makes sense for two people who are in a stable relationship and already share finances. Also keep in mind that many major credit card issuers do not offer joint credit card accounts.
Aauthorized userOn the other hand, it can make sense to strengthen a beginner's solvency. By adding them to your account, you can help them determine your creditworthiness.
take that away
An authorized user and joint credit card account are different ways two people can share a credit card account. In the case of a joint credit card account, both parties jointly open the account and are equally and separately responsible for all charges to the account. In the case of an authorized user of an account, only the primary cardholder is responsible for charges. These differences can help you decide which schedule (if any) is right for you.
There are other considerations when applying for a credit card, such as whether you get a reward with every purchase. If you're looking for a new credit card, you might want to check out a premium credit card like this one.Sofi credit card. You can earn cash back rewards on every eligible purchase, which you can then use to travel, invest, save or pay off eligible SoFi debt. You can even add authorized users to your SoFi credit card for additional rewards.
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Frequently Asked Questions
Is a joint credit card holder the same as an authorized user?
No, a joint credit card account is not the same as an authorized user on your account. With a joint credit card, both account holders are equally and separately responsible for all charges on the account, regardless of who actually makes the purchase. In the case of an authorized user account, only the primary cardholder is responsible.
Is it better to be an authorized user or to have your own credit card?
If you are an authorized credit card user, you can make purchases and determine your creditworthiness, but you are not responsible for any charges. Especially if you're just starting out, it can make sense to be an authorized user. At some point, however, it might make sense to work on your own credit card account where you don't have to depend on anyone.
Can there be two names on a credit card?
Usually there are not two names on a credit card, even if it is a joint account. Both with a joint account and as an authorized user, each person gets their own credit card in their name. Depending on the card issuer, the credit card account number may be the same or different.
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Financial Tips and Strategies:The advice on this website is general in nature and does not take into account your objectives, financial situation or specific needs. You should always consider the appropriateness of these measures in light of your own circumstances.
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FAQs
Joint Credit Card Account Holder vs Authorized User | sof? ›
With a joint account, both people can make purchases, and both are fully responsible for the bill; with an authorized user setup, both can make purchases, but only one is legally liable for paying.
Is it better to have a joint credit card or authorized user? ›For example, opening a joint credit account may make more sense if you're a married couple than if you're trying to help your teenager establish a credit history. And if you want the flexibility to add and remove someone from your account, an authorized user arrangement would be a better fit.
What is the difference between authorized user and joint account holder? ›At the most basic level, an authorized user is someone who is approved to make credit card purchases with your account but is not responsible for the credit card balance. A joint account holder is someone who co-owns a credit card account and is equally responsible for paying the balance.
What's the difference between being an authorized user and being co signed to a credit card? ›Adding someone as an authorized user means trusting that person to use the card responsibly. But co-signing a credit card for someone ups the ante. That's because co-signing means you're basically vouching for the other person's purchases.
Does a joint credit card build credit for both? ›Joint credit cards help you build credit together
If you and a trusted family member or friend are comfortable sharing details of your credit card spending and promise to share responsibility for paying your debt, a joint credit card can help you both build good credit.
Just know that becoming an authorized user comes with some risk, since you don't control the account. If the primary account holder doesn't pay their bill, has too high of a balance or closes their account altogether, your credit can be negatively impacted.
Is there a downside to adding authorized user? ›The primary cardholder is solely liable for payments. The card issuer may charge an annual fee to add an authorized user. The credit scores of both authorized user and primary cardholder can suffer when either person mismanages the account.
Who is the main account holder in a joint account? ›Primary account holders are legally responsible for the account. Primary account holders can name others as "authorized users" on the account, but they remain responsible for it. Joint account holders share responsibility for that account and both are considered primary account holders.
Who owns what in a joint account? ›If you're married or in a civil partnership, money in a joint account belongs to both of you equally.
Who has control in a joint account? ›A joint bank account generally works like any other checking or savings account. The difference is that two people—married or unmarried partners, parent and child, senior and caregiver—own the account and both have full control over it.
How much will my credit score go up if I become an authorized user? ›
Being added as an authorized user will not have a significant impact on your credit score, because you're not responsible for paying the bills.
Can an authorized user ruin your credit? ›If your credit card company doesn't report authorized users, adding them to your account will have no impact on their credit score. If, on the other hand, your credit card company does report authorized users, it can help them start building up credit.
Will adding my spouse to my credit card help his credit score? ›Sharing a credit card can help the partner with the lower credit score start to build their credit and raise their score. There are two options for sharing a card, Kuderna explains. You can open a joint card or have the spouse with the lower credit score become an authorized user on the other's credit card.
Will joint account hurt my credit? ›If one of you has a poor credit history, it's not usually a good idea to open a joint account. As soon as you open an account together, you'll be 'co-scored' and your credit ratings will become linked. This doesn't happen by just living with someone – even if you're married.
Will opening a joint account with someone affect my credit score? ›For couples, joint accounts mean transparency about who is spending what and can prevent arguments about money. However, if one of you has a poor credit history then opening a joint account or creating a financial association means the other person will be co-scored, potentially lowering their credit score.
Can I build my credit by being an authorized user on a credit card? ›Becoming an authorized user can help you build your credit history and boost your credit score, but it shouldn't be the only tool in your credit-building tool box. You should also take out credit cards in your own name and practice using those cards responsibly in order to see your score improve over time.
Why did my credit score drop when I was added as an authorized user? ›If you've added an authorized user to your credit card account, they'll typically get a credit card linked to your account and can use it to make charges, but they're not responsible for paying the balance. Any charges the authorized user makes can increase your credit utilization, which can lower your credit scores.
Will putting my daughter on my credit card help her credit score? ›Adding your child as an authorized user can help establish their credit history. Once they're added to the account (or once they turn 18, depending on the card issuer), the account's entire history will be added to their credit reports.
Do authorized users get credit checked? ›Authorized users usually won't run into this problem, as there's generally no credit check involved. The authorized user strategy is common for parents who want to help their children build credit. If your parent has established a positive credit history, you may want to ask them to add you as an authorized user.
Will adding my husband as an authorized user help his credit? ›Make your spouse an authorized user on your credit card
By someone as an authorized user on your credit card account adds your credit history to their credit report. The effect is most powerful when you add someone to an account with a great record of on-time payments.
When should I stop being an authorized user? ›
End the relationship early, if necessary
And even if you are only the authorized user on the account, that high balance could become part of your credit history. “If a primary cardholder runs up a high balance and intends to carry said balance for a long time, it's likely best to part ways,” says Delva-Gonzalez.
Becoming an authorized user on someone else's credit card account is a strategy for improving credit quickly. It works best if the primary user's card has a long record of on-time payments and a high credit limit and the authorized user doesn't have recent blemishes on their credit report.
Is a joint account holder responsible for debt? ›When you have a joint account, each account holder is responsible for the full amount of the balance. The credit card company can seek to collect the amount due from either account holder.
What are the disadvantages of a joint account? ›- Lack of control. You cannot control how the other party spends your money. ...
- A partner's debt could be an issue. Now that you are merged into one account, you need to be open to your partner paying his or her individual debt from your joint account. ...
- No privacy. ...
- Termination of the relationship.
All owners of a joint account pay taxes on it. If the joint account earns interest, you may be held liable for the income produced on the account in proportion to your ownership share. Also any withdrawals exceeding $14,000 per year by a joint account holder (other than your spouse) may be treated as a gift by the IRS.
Are joint accounts frozen when one person dies? ›Are joint bank accounts frozen when someone dies? In most cases, if an individual forming part of a joint account dies, the surviving account holder will gain full access to the funds and continue to be able to operate the account. The funds do not form part of the deceased estate.
Do joint account holders have equal rights? ›They have equal withdrawal rights and each signed the signature card. At the same IDI, John and Mary also keep their joint savings account. Mary and John also co-own a CD with Robert Smith. Mary and John believe everyone is fully insured because there are three joint account owners and a total balance of $750,000.
What are the 2 types of joint accounts? ›In the United States, there are typically two types of joint accounts: survivorship accounts and convenience accounts.
Can you remove a joint owner from an account? ›In most cases, either state law or the terms of the account provide that you usually cannot remove a person from a joint checking account without that person's consent, though some banks may offer accounts where they explicitly allow this type of removal.
Are joint accounts protected from creditors? ›Creditors may be able to garnish a bank account (also referred to as levying the funds in a bank account) that you own jointly with someone else who is not your spouse. A creditor can take money from your joint savings or checking account even if you don't owe the debt.
What happens to a joint account when one person does? ›
Joint bank accounts
If one dies, all the money will go to the surviving partner without the need for probate or letters of administration. The bank may need the see the death certificate in order to transfer the money to the other joint owner.
Summary. Removing yourself as an authorized user can lower your credit utilization ratio and the age of your credit history, both of which can have a negative impact on your credit score.
Do authorized users get a hard credit pull? ›Does adding an authorized user result in a hard credit pull? Adding an authorized user typically doesn't result in a hard inquiry (also called a hard credit pull) for either the authorized user or the primary account holder.
Will authorized user build credit without SSN? ›Can I build credit without SSN? Yes, you can build credit without an SSN. There are a few ways to do this, such as getting a credit builder loan or becoming an authorized user on someone else's credit card. You can also build credit by paying your bills on time and keeping your balances low.
Will adding my child as an authorized user help his credit? ›Will adding my child as an authorized user help his or her credit? Yes, adding children as authorized users can help their credit scores. It's up to the primary cardholder to maintain a healthy credit score so the authorized users can reap the benefits.
How long does it take for authorized user to show on credit report? ›How Long Does It Take for an Authorized User To Show Up on a Credit Report? If this information is reported, it will typically show up on your credit report in around 30 days. However, some lenders do not report authorized users to credit bureaus, in which case the authorized user may not appear at all.
Does credit card debt pass to spouse? ›The bottom line. You are generally not responsible for your spouse's credit card debt unless you are a co-signer for the card or it is a joint account. However, state laws vary and divorce or the death of your spouse could also impact your liability for this debt.
Should both spouses have their own credit card? ›It's often best for both spouses to have credit card accounts, in order to build and maintain strong credits scores by making timely payments. Better still, opening a new account means offers of rewards and other perks to enjoy.
What happens if I add my wife to my credit card? ›What are the benefits of adding your spouse as an authorized user? Adding your spouse as an authorized user to your cards can be convenient. You can both charge on the same credit card account so you have one joint monthly bill to pay instead of having separate cards you each use.
Why a joint account is a bad idea? ›One spouse's poor credit likely won't impact the other, but if you open a joint account, it will appear on both of your credit reports, which could affect any joint applications for a mortgage or other loan. A lender would co-score both spouses, which may mean taking the lowest or median credit score, Pareto explains.
What are the rules for joint account? ›
Following are the Joint Bank Account Rules in India per the account mode. Joint: All transactions in the account must be approved and signed by all the account holders. If any one of the account holders dies, the account will be deemed inoperable, and the bank will pass on the balance in the account to the survivor.
Is it better to have a joint account with your husband? ›Joint account for everything
"The advantage of this situation is that you can both see exactly what's going on financially at all times," says Norma. "That's very healthy." It can also be a good way of managing your money if one of you doesn't currently have an income, or you earn very different amounts.
There's no such thing as a marriage credit score. So credit histories and scores don't combine when you get married. And how your spouse uses their individual credit accounts can't impact your individual credit accounts.
Can a joint owner see my bank account? ›A joint owner or co-owner means that both owners have the same access to the account. As an owner of the account, both co-owners can deposit, withdraw, or close the account. You most likely want to reserve this for someone with whom you already have a financial relationship, such as a family member.
How does joint credit score work? ›When applying jointly, lenders use the lowest credit score of the two borrowers. So, if your median score is a 780 but your partner's is a 620, lenders will base interest rates off that lower score.
Can you be denied as an authorized user? ›American Express authorized users can be denied if they are younger than 13 years old or if they have a bad history with Amex, such as past defaults or lawsuits with the company.
Am I responsible for the debt if I am an authorized user on a credit card? ›Am I liable to repay the debt? No, being an authorized user generally does not obligate you to pay the debt. If a debt collector insists that you co-signed the account but you believe you did not, you may request that the collector provide evidence, such as a copy of a contract that you signed.
Does making someone an authorized user improve their credit? ›When you add an authorized user to your credit card account, information from the account — like the credit limit, payment history and card balance — can show up on that person's credit reports. That means their credit can improve as a result of being added to a credit account you keep in good standing.
Will my credit improve if I am an authorized user? ›Becoming an authorized user can help you build your credit history and boost your credit score, but it shouldn't be the only tool in your credit-building tool box. You should also take out credit cards in your own name and practice using those cards responsibly in order to see your score improve over time.
Do authorized users build credit as well? ›Being added as an authorized user on another person's card may help you establish a credit history or build your credit. Yet cardholders and authorized users' on-time, late or missed payments will be added to both parties' credit reports, so it's important that cardholders and authorized users see eye to eye.
Does having a joint account affect credit score? ›
If one of you has a poor credit history, it's not usually a good idea to open a joint account. As soon as you open an account together, you'll be 'co-scored' and your credit ratings will become linked. This doesn't happen by just living with someone – even if you're married.
Will adding my wife as an authorized user help her credit? ›Make your spouse an authorized user on your credit card
By someone as an authorized user on your credit card account adds your credit history to their credit report. The effect is most powerful when you add someone to an account with a great record of on-time payments.
If the card in question has been well maintained with on-time payments and low credit utilization, removing the authorized user from the account will effectively erase that positive payment history from their credit report.
How much will my credit score go up as an authorized user? ›Being added as an authorized user will not have a significant impact on your credit score, because you're not responsible for paying the bills.
How much will piggybacking raise my score? ›The only good news is that mortgage loans still use the older Fico scoring models. Therefore, piggybacking credit still works to boost your score when applying for a mortgage. Piggybacking credit can be a great tool to use to boost your Fico score by 100 or more points, in just a few days.
Is a joint couple account a good idea or not? ›Joint accounts can make it easier to budget and share financial information as a couple. Separate accounts might be a better fit for you if you want to keep most of your financial information private.
What are the benefits of a joint account? ›The main benefit of a joint bank account is that it makes your financial life easier. You can reduce the time, cost and hassle of paying bills by sharing household expenses such as mortgages, car payments, utilities and groceries. You can also save toward shared goals, such as a new home or a vacation.