Teenagers and young adults are often added as authorized users to their parents' or other relatives' credit cards because they don't make enough money on their own to afford to pay expenses, such as food or college costs. Authorizing credit card use is an easy way to make money available. If you're an authorized user, you should take time to understand exactly what your responsibilities are.
Not Liable for Debt
If you're an authorized user on a credit card and the person who owns the card stopped making payments, you might get calls from collection agencies. Don't worry about them. As an authorized user, you have no legal liability for that credit card debt, no matter what your age or financial status. Don't let a bill collector guilt you into making a payment.
In Case of Death
If the absolute worst happens and the relative who owns the credit card account passes away, the authorized user is still not responsible for the debt. It doesn't matter that it's now impossible for the account holder to make payments. The deceased love one's estate will handle the debt. If you ever find yourself in this situation and you're 18 or older, it might be helpful to confirm that you're an authorized user and not a joint account holder. Joint account holders are responsible for debt.
Building Your Credit
Even when you're young, it's important to start thinking about your credit history. If your credit somehow gets messed up early in life, it can have a severe impact on you when you're older and ready to get a mortgage or a car loan. Sometimes parents add their children as authorized users on credit cards because this can help their children build a good credit score.
Downside to Authorized Users
Being an authorized user lets a person build his credit while keeping him free of liability for debt. But there's still a downside. If the person who owns the account becomes delinquent on his payments or declares bankruptcy, this will reflect poorly on the authorized user's credit history. Late payments will show up on his credit report too. If the authorized user has reason to believe this is about to happen, he should immediately send a certified letter to the bank or credit card company requesting that he be removed as an authorized user. If he's under 18, he should have a guardian or parent help him with this process.
- South Central Daily News: Even When Collectors Hassle, Authorized Users Not Liable for Credit Card Debt
- BCS Alliance: Being An Authorized User on a Credit Card Could Destroy Your Credit Rating
- MSN Money: Who Pays Off Credit Card Debt After a Death?
- Experian: Adding a New Spouse as Authorized User Can Help Build Credit History
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