Quick Points: The benefits of adding a relative as an authorized user

Editor’s note: This is a recurring post, regularly updated with the latest information.

Adding a loved one, such as a partner, child, family member or friend, as an authorized user on a credit card, has multiple advantages.

Firstly, it can simplify your financial management. Instead of using multiple cards and dealing with separate bills or settling expenses later, you can divide the costs between two individuals or pay from a shared account, depending on your circumstances. Additionally, the primary cardholder will receive all the points, which can be beneficial if the authorized user is not concerned about earning points.

Moreover, authorized users on select cards can enjoy additional perks. Today, we will explore these benefits and how this can enhance your points accumulation while benefiting the authorized user.

Benefits of adding an authorized user

Boarding American Airlines — You can earn Loyalty Points from multiple streams by adding an authorized user to your American Airlines cobranded credit card. KYLE OLSEN/THE POINTS GUY

Beyond just simplifying expenses, there are some lesser-known benefits to adding authorized users to your credit cards. Some of these include:

The primary cardholder earns rewards on all transactions — and after all, if you’re liable for paying an expense, you might as well reap the rewards, too.
Likewise, the authorized user’s spending usually counts toward the minimum spend requirement for welcome offers.
The authorized user will build credit when you pay your card on time, which can be beneficial if you add your child as an authorized user.
Speaking of children, authorized user cards generally have lower age requirements. For example, American Express lets those as young as 13 years old become authorized users. Chase doesn’t have a minimum age limit.
Some premium cards let authorized users access travel benefits. For example, authorized users of the Capital One Venture X Rewards Credit Card can access Capital One lounges without the primary cardholder.

In most cases, authorized users are still eligible for the card’s welcome offer if they apply for their own card. So, if you add your partner as an authorized user on your Capital One Venture Rewards Credit Card and later decide to open their own card, they’re still eligible for whatever welcome bonus the card offers when they apply.

The risks of adding (and being) an authorized user

Hilton Hawaiian Village Waikiki — KYLE OLSEN/THE POINTS GUY

Adding an authorized user doesn’t come without risks.

The main risk of adding an authorized user to your account is that you’re still responsible for all charges posted to the account, even if your authorized user makes the purchase. With this in mind, you should only add extremely trusted individuals as authorized users on your card.

One way to mitigate this risk is by adding spending limits to authorized user cards. American Express is one of the best issuers in this regard, as it lets you set limits as low as $200 for authorized user cards.

Further, authorized users take on some risk when added to someone else’s account. The authorized user’s credit may also suffer if the primary cardholder doesn’t pay their bill on time.

If you find yourself in this situation, call the issuing bank and ask to be removed as an authorized user. You can then dispute the late payment with the credit bureaus if necessary.

Bottom line

Adding a relative or another very trusted person as an authorized user is a great way to build up your points stash while helping that person build credit and take advantage of various perks. But before adding an authorized user to your account, ensure you’re comfortable with the risks.