Joint Account? Authorized User? Which is Best for Credit Sharing?

There are two ways to share a credit card: via a joint account (owner) or as an authorized user. Both options have risks and advantages that fluctuate depending on each user’s unique situation, so it’s important to understand each before choosing one.

How they’re similar

In either scenario, both users are authorized to use the account for purchases. In most cases the payment history is reported on both of your credit reports, regardless of who actually uses the account.1 They’re both effective ways to build your credit history or help someone else build theirs—as long as each of you use that credit wisely.

How they’re different

The most significant difference between sharing a joint account and being/having an authorized user is the person responsible for making payments and repaying the debt.

On a joint account, both parties are held equally responsible for making payments on time and keeping credit usage to a manageable level. If payments are made on time, both parties benefit from having positive payment history reported to the credit bureaus. If payments are late or skipped, it could negatively affect both credit reports. Joint accounts are normally recommended for couples that already share expenses, and in general are initially opened as joint accounts rather than adding someone to an existing account.  Please keep in mind, however, not all issuers are the same.  Merrick Bank, for example, does not offer joint accounts.

Authorized users, on the other hand, are in general not legally responsible for making payments, even though their credit profile may be directly affected by the payment history on the account. Before becoming an authorized user on someone’s card, consider what you know about their habits, and whether you believe the account will be managed responsibly.

On the flip side, adding someone as an authorized user to your credit card account—usually a spouse or child over 16 years old2—may be a great way to help someone begin using credit and establish a credit history. Just be certain that they will be responsible and follow your parameters for usage. Authorized users can usually be removed from the account with a simple phone call. Please keep in mind, however, not all issuers are the same.  Merrick Bank, for example, will add anyone as an authorized user, but account history will only be reported to a spouse’s credit bureau.

Consider carefully before choosing either

With a joint account or an authorized user, you’re counting on the behavior of another person, so the choice is not to be taken lightly. It’s best to keep it in the family and not share credit with friends, roommates or others unless you have a strong, trusting relationship.