Should You Have a Joint Credit Card or an Authorized User?

Find out the best way to share a credit card and build credit.

Laura Adams, MBA
5-minute read
Episode #188

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Whether you should co-sign for a credit card with another person is an important decision. In this article, we'll explore what it means to be a joint credit card account owner versus having an authorized user. After considering the pros and cons of both options, you'll know which credit card setup is best for your situation.

Should You Have a Joint Credit Card?

When you apply or co-sign for a credit card with someone else, such as a spouse, a relative, or a friend, you become joint account owners. You each receive a card in your own names and share the responsibility for making monthly payments. But what many people don't realize is that joint credit card owners are each one hundred percent responsible for all the debt that accumulates on the card.

Cons of a Joint Credit Card Account

The financial risk that comes with sharing liability for a credit card is something no one should take lightly. Transactions on a joint account are reported on both of your credit reports and therefore affect both of your credit scores. Let's say you co-sign for a credit card with your boyfriend and he goes on a spending spree and charges thousands of dollars worth of surfboards, bikes, and fly rods. Even if you're in the dark about those toys or never use them, if your name is on the account and you break up, guess what? Yup, you'll be expected to pay for all of his credit card charges if he mysteriously disappears. If you don't make payments on a credit card account that's in your name, it'll be a huge black mark on your credit report and you'll see your credit score plummet. Talk about a bad romance.

Pros of a Joint Credit Card Account

However, there are benefits to having a joint credit card if you have poor credit and can't get approved for your own credit card. If someone with stellar credit is willing to co-sign an account with you, you'll probably ride their credit-worthy coat tails and get the card. When you both use the card responsibly—by never overspending and always making payments on time each month—both of your credit scores can increase. This is a great strategy to start building credit if you're under 21 or are just starting out on your own. A parent can co-sign for a card with their child, for instance. But as I mentioned, when either party abuses a joint credit card, it negatively affects both account owners.

What is an Authorized Credit Card User?

Another way to share a card without sharing in the liability is to add one or multiple people to your account as an authorized user. Being an authorized user allows them to have a card in their name, with no legal responsibility for the debt. When you're the primary cardholder you're the only person who's responsible for the debt and for making monthly payments.

Why on earth would you want to add someone as an authorized user when you don't feel comfortable sharing a joint credit card account? I'll explain more in a bit, but the quick and dirty answer is that this is a common arrangement for parents and their children.


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.