Authorized Users Are Not on the Hook for Unpaid Credit Card Debt

If you’re an authorized user on a credit card, you get the benefits without the risks of having a credit card in your own name. Being an authorized user lets you use someone else’s credit card (such as your spouse’s or parent’s card). And being an authorized user could even help increase your credit score if the primary cardholder manages the account responsibly. 

But what happens if the cardholder who added you to the account as an authorized user stops paying their credit card bills or dies? Are you on the hook for the unpaid credit card debt on that account? Do you need to seek credit card debt relief? 

Luckily, the law is very clear here. Authorized users aren't liable for the cardholder’s balance. And that includes any items you yourself charged to the account.

But that may not stop collection agencies from harassing you for the money. Let’s look at why authorized users aren't on the hook for credit card debt—and what you should do if debt collectors come calling. 

What is an authorized user?

An authorized user is someone added to a credit card account by the primary cardholder. They can make purchases, but they're not financially responsible for the unpaid credit card debt. Here are a few examples of situations when people might be added as authorized users on credit cards: 

• Parents and children: Some parents add their teenage children (or young adult children) as credit card authorized users. 

• Spouses: Married couples might add each other as authorized users to their credit cards for greater convenience in paying bills. 

• Domestic partners: If you share your personal finances with an unmarried domestic partner, sibling, or roommate who you trust with money, becoming authorized users on the same credit card could also be an easy way to split the bills each month or pay each other back for ongoing purchases.  

Being an authorized user gives you a copy of the credit card that you can keep in your wallet and use to make purchases. But it doesn’t give you total authority over the credit card account. An authorized user can't manage the credit card account or change the card's terms. Those tasks and responsibilities belong to the primary cardholder.

The activity on the card (by the primary cardholder and the authorized user) could be (and typically is) reported to the credit bureaus. Keeping the balance low and making the payments on time could help both users build or maintain a good credit standing. Likewise, late payments or high balances are likely to have a negative impact on both people’s credit. 

If you have poor credit or no credit, getting added as an authorized user to someone else’s card could be a good way to build your credit, provided they handle the account responsibly.

Freedom Debt Relief is not a Credit Repair Organization and does not provide, or offer, services or advice to repair, modify, or improve your credit.

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Authorized user vs. co-signer: key differences

There are a few big differences between an authorized user on a credit card versus a co-signer on a credit account. Being a co-signer brings extra responsibilities and risks. Let’s look at the details. 

Authorized user: get access to credit with lower risk

If you can be added to the credit card of a responsible adult with good cash flow, being an authorized user is generally a good way to build your credit score without taking risks. An authorized user usually has access to their own physical credit card, and can make purchases on it. But they aren't legally responsible for repaying the debt. They benefit from the account’s positive credit history without being liable for any balances.

Co-signer: More responsibility

A co-signer has more risk and responsibility than an authorized user. When you agree to co-sign on a loan or credit account, you're taking a full share of responsibility for that loan or credit card. Being a cosigner means you're saying to the bank or lender, “I agree to repay this debt if the other person cannot.” 

If the primary cardholder defaults, the co-signer must pay off the credit card debt. Being a co-signer affects both people’s credit and obligations. This is much different from being an authorized user who has no liability.

Who is liable for unpaid credit card debt?

Authorized users don’t have to pay credit card debt. Only two types of people are on the hook for outstanding balances on a credit card or store card:

• The principal cardholder. This is the person who opened and owns the account.

• Anyone who co-signed the account application. A co-signer is someone who takes financial responsibility for the account. Typically, the co-signer provides their identity and financial information to the lender as a way to help the primary applicant qualify. The co-signer doesn’t get the privilege of using the account, but becomes financially responsible for it if the primary account owner fails to repay the debt.

In this way, being an authorized user is a better deal than being a co-signer. If you co-sign for someone else’s loan or credit card, you're helping them. If you get added as an authorized user to someone else’s credit card, they are helping you. 

Debt collectors can make mistakes 

Even though authorized users don’t have to pay credit card debt, sometimes debt collectors might contact you for someone else’s unpaid debt. That’s because debt collectors make mistakes. 

Collection agencies often receive incomplete paperwork or incorrect details about the accounts that they’re trying to collect on. If you’re an authorized user whose name is associated with an account, debt collectors might mistakenly believe that you’re a cosigner rather than an authorized user.

Some unscrupulous or unethical collection agencies might know that you’re an authorized user, but will contact you anyway. Even though the debt collectors know that authorized users aren’t required to repay the debt, they might try to harass you into paying for the unpaid credit card debt. Don’t fall for it. 

Keep in mind that as an authorized user, you’re not required to pay the debt and it’s not your responsibility. Tell debt collectors to stop contacting you. 

Debt collectors can take shortcuts

By law, debt collectors are responsible for proving that you owe a debt. But some collection agencies start collecting on a debt without doing their homework. 

If you’re getting contacted by debt collectors about a credit card where you’re an authorized user, you might want to show the collection agency why they’re wrong. The best way to prove your status as an authorized user is to show your credit report. Credit card companies typically report authorized users’ status to credit bureaus, so it should appear on your credit report. 

Get a copy of your credit report. It should show that you’re listed on the credit card account only as an authorized user. This is the fastest, easiest way to get rid of debt collectors—prove to them that you’re an authorized user with no responsibility for the unpaid credit card debt. 

You’re legally entitled to a free copy of your credit report every week. Get your credit reports from all three major credit reporting companies at AnnualCreditReport.com, the only website authorized by the federal government to provide the free credit reports you are entitled to by law. 

How to stop collector harassment

Not all collection agencies are honorable and ethical. Some debt collectors unfortunately use high-pressure methods that become stressful and harassing. Sometimes the calls, texts, emails, and letters don’t stop.

Anyone who’s being harassed by collectors is protected under the Fair Debt Collection Practices Act (FDCPA). You can write a letter to the debt collector telling them to stop all contact with you. Be sure to mention the FDCPA, keep a copy of your letter, and mail it with proof of delivery requested. 

Whether you’re an authorized user or not, even if you’ve fallen behind on your own credit cards or other bills, everyone has the right to tell debt collectors to stop contacting them. You’re allowed to send this letter to collection agencies, even if you really do owe the money. Collectors must then halt all communications. 

Whether you owe the money or not, some collectors might ignore your letter. Keep a record of all of the following calls.. Start a file and save copies of all electronic and regular written communications that you send to or receive from the debt collector. 

If you can prove that a debt collector is continuing to contact you even after you told them to stop, you can report the collection agency to the Federal Trade Commission and your state’s consumer protection agency. You might even be able to sue the debt collector for money.

Can being an authorized user help your credit?

Yes, being an authorized user can improve your credit standing. But it depends on the primary cardholder's financial behavior and credit habits. On-time payments and a low balance can boost your credit score, even as an authorized user. Some credit card issuers report authorized user activity to the credit bureaus. That’s why being an authorized user can be an easy way to start building credit history without being responsible for the credit card debt. 

However, being an authorized user will only boost your credit if the primary cardholder uses good credit habits. On the flip side, negative activity like falling behind on payments and a high credit usage could hurt your credit—even if you’re only an authorized user.