If you share your credit card with another individual, the other person's activity will affect you in several ways. One thing is certain -- both of you can make charges on the card. However, since there's one monthly balance, one due date, one payment and only one credit limit, you'll have to consider the legal liability of meeting the the balance and agree on usage and payment terms.
Type of Secondary User
You can add someone to your credit card account in two distinct ways; as a joint account holder -- also called co-signer -- or as an authorized user. If the two of you apply for the credit card at the same time, both of you will sign the contract agreement and the two of you are responsible for paying the debt. The issuer allows you to choose the primary cardholder and secondary cardholder. If you've given permission for the other party to charge on the card as an authorized user, he will not need to sign the contract.
Primary Cardholder Responsibilities
You're responsible for ensuring on-time credit card payments even if the secondary cardholder incurred the charges. Clarify the terms of agreement with the secondary cardholder. Set limits and review monthly statements with the other account holder to ascertain no fraudulent purchases or withdrawals are being assumed. In case of a split, you should call the issuer to remove the authorized user. However, if your relationship with your joint account holder sours, both of you still are legally responsible for clearing the credit card bill.
Once the card issuer approves your application for a joint credit card, you share full responsibility for making payments on the account. In case of default, the issuer has the legal right to pursue payment from you. To be removed from the account, the issuer must agree to alter the contract, requiring the primary cardholder to be able to qualify for the account independently. Otherwise, you can pay the balance and close the account.
Authorized User Responsibilities
As an additional cardholder, you should be conversant with the card limit and the penalties for exceeding this limit. Although you can charge your purchases to the credit card account and have no legal obligation to make payments, late payments may affect your credit history as well as the primary holder's. You have the moral and ethical obligation to meet your part of the bargain -- use the credit card prudently and remit payments to the primary cardholder.
- Care One: Who Has to Pay the Credit Card Bill?
- BalancePro.net: Authorized Credit Card Users -- Making Informed Choices
- Discover Bank. "Does Being an Authorized User Impact Your Credit Score?" Accessed Oct. 31, 2020.
- Citigroup Inc. "The Pros and Cons of Sharing a Credit Card Account." Accessed Oct. 31, 2020.
Dr Jack Gordon, the Chief Technology Officer at Strontium Logistics, is a 20-year veteran of the engineering and marketing business who favors stiff drinks, good debates and developing innovative digital marketing strategies to help companies grow.