If you have a credit card, you are the cardholder. The bank that issued the card, account and credit line is known as the card issuer. In some cases, businesses are cardholders. You'll see the term "cardholder" on certain legal documents, such as your terms printed on your monthly credit card statements.
Credit cards are revolving credit accounts that allow great freedom for making purchases. As the cardholder, you own the account and can use the credit line at your discretion, but you are also responsible for repaying the bill. Card issuers provide repayment options, but you cause negative consequences to your credit rating if you do not fulfill the financial responsibility.
Definition of a Cardholder
A credit card holder is a person who applies for a credit card account or redeems a pre-approved offer to obtain one. The cardholder's name appears embossed on the credit card and the billing statements. If you let someone else use your card, you are still legally responsible for its use, and you are still the cardholder, even if you don't physically have it.
The credit card account information shows up on the cardholder's Experian, TransUnion and Equifax credit reports, including current balance, total credit line and payments. Negatives, such as credit cards charged off as bad debts or court judgments for unpaid accounts also appear on the reports.
Becoming a Cardholder
You become a credit card holder by filling out an application, either online or on paper, and submitting it to the card issuer. The application asks for personal and financial information, including your name, address, income information, other credit cards and bank accounts.
The card issuer evaluates the information, checks your credit reports and decides if you are a good risk for a new account. You receive a credit limit and a card with which to access it upon approval, thus making you a cardholder.
Alternatives to Credit Cards
Being a credit card holder helps your credit rating if you use the account responsibly by keeping your balance low and always paying the bill on time. Credit cards are also important to credit rebuilding after financial problems, since lenders want to see a good current payment history.
Secured credit cards are alternatives when you do not qualify for traditional accounts. You can become a secured cardholder by saving up at least $200 to $300, depositing it with a bank, and getting a card with a credit limit based on that deposit.
Other Issues to Consider
Cardholders can add authorized users to credit accounts, which allow designated individuals to receive a card of their own for charges on the account. Authorized users have no legal repayment obligation. Consequently, never give someone access to a credit card account if you are unwilling to pay the bill if they refuse to reimburse you.
Individuals can also co-sign for another person's credit card if his credit rating is not strong enough to qualify for the account. While the other person is the primary cardholder, you are fully responsible for the bill if they default. The credit bureau reflects this credit line on your report.
Based in Kissimmee, Fla., Barb Nefer is a freelance writer with over 20 years of experience. She is a mental health counselor, finance coach and travel agency owner. Her work has appeared in such magazines as "The Writer" and "Grit" and she authored the book, "So You Want to Be a Counselor."