What Is a Primary Account Holder?

Primary Account Holder Explained in Less Than 4 Minutes

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A primary account holder is the main user on a credit card or bank account. That person is liable for repaying the debt and keeping the account in good standing. They also have the authority to make changes to the account.

As a primary account holder, your responsibilities will vary, depending on the type of account you open. Understanding the liabilities that come with being a primary account holder will help you make better financial decisions in the future.

Definition and Examples of a Primary Account Holder

A primary account holder is the main user on an account and is responsible for any charges on that account. You’re responsible for any debt incurred, and you have the ability to make changes to the account.

  • Alternate definition: The primary account holder is responsible for maintaining all transactions associated with a credit card or bank account.

For instance, if you’re the primary account holder, or borrower, on a credit card, you can add an authorized user to your account. That person will receive their own card that they can use to make charges, within the scope of any spending limits you’ve set for them.

How a Primary Account Holder Works

There are two main types of accounts a primary account holder will operate: a bank account or one for a credit card. The application process and responsibilities involved vary slightly for both types of accounts.

Bank Account

When you open a bank account, you’ll usually need to give the bank your name, address, and Social Security number. As the primary account holder on a bank account, you’re responsible for keeping that account in good standing. That involves maintaining the minimum balance on all of your accounts and avoiding overdrafts.

As the primary account holder, you have the option to add a joint user to your checking or savings account.

Credit Card

Applying for a credit card is a bit more rigorous than opening a bank account. In addition to supplying personal information, you’ll have to undergo a credit check.

As the primary account holder on a credit card, you’re responsible for making timely payments and paying down the debt. You also can make changes to the card, such as adding an authorized user to the account or seeking an increase in your credit limit.

Primary Account Holder vs. Authorized User

Sometimes, a primary card holder will add a friend or family member to a credit card. The secondary account holder is referred to as an authorized user, and that person has different responsibilities and requirements.

Primary Account Holder Authorized user
Bears responsibility for making payments on time. Bears no responsibility for making timely payments or repaying the debt.
Can add or remove secondary card holders and make changes to the account. Can’t make any changes to account details other than to remove themselves from the card.
Is responsible for the debt if the secondary account holder runs up a high balance. Credit score will be negatively affected if the primary account holder stops making timely payments.

An authorized user gets the benefits of using the credit card without the responsibility for repaying the debt. In most cases, if the primary account holder stops making payments or defaults, the bank can’t hold the authorized user responsible for that debt, although skipped payments or high credit utilization can negatively affect the authorized user’s credit history.

The primary account holder has the authority to make changes to the card. They can add or remove an authorized user or cancel the card. In comparison, an authorized user can’t make any of those changes.

Both the primary card holder and the authorized user can be negatively affected by the other person’s actions with the account.

If the primary card holder stops making payments, both individuals will see their credit scores go down. If the authorized user runs up a high balance, the primary account holder is responsible for repaying that debt.

For that reason, always be careful when giving an authorized user access to your credit card or bank account. You should only become an authorized user on someone else’s credit card if you trust that person to make on-time payments.

Key Takeaways

  • A primary account holder is the main user on a credit card or bank account, and is responsible for keeping that account in good standing.
  • The primary account holder can make changes to the account and add an authorized user, if they so choose.
  • A secondary account holder, called an authorized user, gets the benefits of using a credit card but isn’t responsible for repaying the debt.
  • Both the primary card holder and the authorized user can have their credit negatively impacted by the other person’s actions.