Authorized Users vs. Joint Account Holders

If you are setting up a new credit card account, you may be interested in knowing the difference between authorized users and joint account holders before you begin adding a person or people to your accounts. This information could save you financial hassles later.

Authorized User

This main difference between the two is that an authorized user is not responsible for paying the bill. This means that the user can use the card as he/she wishes and the only person who is liable for paying the bill is you. For this reason, you would only want to add an authorized user that you deem to be responsible and one that you totally trust would not run up your credit, irresponsibly.

Joint Account Holder

A joint account holder, on the other hand, can use the credit card just as authorized user can. The difference is that this person is just as responsible as you are. Thus, if this person runs up the credit, the person is liable for paying it. If the credit debt is not paid or is late, this information can also be noted on the joint account holder's credit report just as it can be reported on yours.

Is it ever a good idea to add an authorized user? Yes, if you totally trust the person. The key word here is "totally".


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