Difference Between a Joint Account Holder and an Authorized User
Spouses, partners, even parents and children sometimes want to share a credit card. A single credit card can make it easier to manage household expenses, help the other person build a good credit score, or provide a source of emergency spending.
There are two ways to share a credit card: as joint account holders or by making one person an authorized user. The two arrangements give you each different responsibilities for the balance, so think carefully before you move ahead.
With both authorized user and joint credit cards, both people cardholders can make charges to the card. There's a single credit limit, balance, minimum payment due, and one payment due date. The credit card account history is reported on both of your credit reports, regardless of who actually uses the account.
Who's Responsible For the Balance?
The major difference between an authorized user and a joint account holder is the person who's responsible for paying the credit card balance.
An authorized user has no legal obligation to repay the credit card debt. Though late payments will affect the authorized user's credit history as long as they're on the account, the credit card issuer can't pursue that person for payment.
On the other hand, the joint account holder is as liable for paying back the credit card balance as the primary account holder. The credit card issuer can use all legal methods to go after both people for payment.
In many cases, each joint account holder must meet the credit and income requirements to be added to the account and can be denied if the requirements aren't met. An authorized user can usually be added to an established account regardless of the user's credit history.
Establishing the Account
You can add an authorized user to a new or existing credit card account at any time. Simply call your credit card issuer and give the authorized user's information. The card issuer will add the authorized user, no credit check required, and send a credit card with their name on it. Since there's no credit check, the authorized user can be added regardless of their credit history and age.
To get a joint credit card, the two of you must apply for the credit card together. The credit card issuer will check both applicants' credit and income information to approve the application. If you're approved, you'll both be added to the account and issued credit cards with your names. Both applicants need to be old enough to open a credit account and meet the credit qualifications for the credit card.
You can't add a joint account holder to an account that's already open.
How Credit Card Sharing Goes Wrong
A joint account can be problematic if the two accountholders end their relationship, especially if the account still has a balance. You can't easily remove a person from a joint account, even if one person made all the charges on the account. The two of you will have to come up with an amicable way to resolve the balance (like paying it off or transferring the balance) and close the account. Even after closing the account, the credit card details will remain on both people's credit reports until the credit reporting time limit has expired.
An authorized user can be removed from a credit card with a simple phone call. The authorized doesn't not have a legal responsibility to repay the balance they charged; removing the person from the account can keep them from running up a high balance out of spite or revenge. Once removed, an authorized user can have an account removed from their credit report by calling the credit card issuer and asking to have the account removed.
Sharing a credit card is risky, whether you have a joint account or you've added an authorized user. If you're thinking about getting a credit card with someone, like a child or spouse, consider the legal liability of paying the balance and the ease of ending the credit card relationship to help you decide.
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.