The Facts About Authorized Users, Secondary Cardholders, and Joint Credit Cards

by Jordan Lavin May 17, 2019 / No Comments

Credit cards are nearly ubiquitous when it comes to consumer borrowing. They’re the first form of credit we’re exposed to as children. They’re often the first form of credit we take on when we become adults – and therefore the first contributor to our credit score. And when making purchases, Canadians never hesitate to take out the plastic, ringing up a little more than five billion charges per year.

Almost as popular as having a credit card is sharing a joint credit card. Whether you share a credit card with a spouse, your parents or your children, there’s a good chance the credit card you use is shared with someone else.

You might have questions about how joint credit cards work. Like, can you build credit when you use your parents credit card? And who’s ultimately responsible for making the payments? And who gets the rewards if it’s a cash back credit card?

Here are some answers.

Joint credit card basics: primary cardholder vs. authorized user vs. co-borrower

Primary Cardholder

Simply put, a primary cardholder is the person who the credit card belongs to in the first place. As a primary cardholder, you’re the one who made the application, went through a credit check, and formally agreed to the terms and conditions (and repayment schedule) of the credit card.

Authorized user (also known as a supplementary cardholder)

An authorized user or supplementary cardholder is another person who the primary cardholder has allowed to use their credit card account. It’s up to the primary cardholder to decide who, if anyone, is allowed to hold a supplementary card.

As an authorized user, you won’t go through a credit card application or credit check. You also don’t need to meet the credit card’s qualification requirements. In a nutshell, you’ll have the ability to access the primary cardholder’s credit limit to make purchases – and that’s it.

Co-borrower (also known as a secondary cardholder)

Not to be confused with an authorized user or supplementary cardholder, a co-borrower refers to someone who applied for a credit card together with another person. Co-borrowers are far less common, and in most cases, couples and family members who share a credit card account usually do so as primary and authorized users.

As a co-borrower, you would go through a credit check and would need to meet certain credit card eligibility requirements.

Will I build credit on a joint credit card?

Authorized user

If you use a credit card responsibly and pay off your purchases, it makes sense that you should build credit for doing so. But when you’re an authorized user or supplementary cardholder, you’re technically using someone else’s credit and card issuers (like banks) won’t be reporting your information to credit bureaus.

So, even if your supplementary credit card has your name on it and a unique number, as an authorized user, your card activity won’t go towards building your credit score. That said, the primary cardholder’s credit score could be affected by the actions of their authorized user – for better or worse.

Co-borrower

Unlike an authorized user, as a co-borrower, your information was included as part of the credit card application, and therefore, your card activity is reported to credit bureaus. That means both you and your fellow cardholder will see the effects of making (or not making) monthly payments on each of your respective credit scores.

Who is responsible for paying the balance on a joint credit card?

Authorized user

The responsibility of paying off the credit card balance lies solely with the primary cardholder and not the authorized user. In fact, the primary cardholder is the only person who will receive a bill. By adding an authorized user, the primary cardholder is giving that person permission to make whatever charges they want on the card.

The primary and authorized user could make an agreement between themselves as to who pays what portion of the bill, but it’s ultimately the primary cardholder who has to pay off the debt.

Co-borrower

As a co-borrower, you and your fellow cardholder will receive monthly statements and will be equally responsible for paying off the credit card balance – regardless of who actually made the purchases.

How do rewards work on a joint credit card?

Authorized user

If you’ve signed up for one of Canada’s best travel credit cards, you’ll be happy to know your authorizer user’s purchases are contributing toward your next vacation. All the charges on a joint credit card will count toward rewards, regardless of which cardholder makes the purchase. The limiting factors are also shared, such as your credit limit and any caps on rewards. The primary cardholder will also have the exclusive right to redeem and use the rewards earned.

Co-borrower

As a co-borrower, you would contribute toward racking up rewards on your purchases. In some cases, you may also have the ability to redeem points, but this may vary by bank and card issuer.

Some final notes regarding authorized users

Credit cards with annual fees typically charge primary cardholders a portion of the annual fee to add an authorized user – usually around $30. The American Express Cobalt Card is one of the few rewards credit cards with an annual fee that allows you to add an authorized user for free.

American Express Cobalt Card

  • Annual fee: $120 (charged at $10 monthly)
  • Free additional cardholders
  • Earn 5 points per dollar on dining
  • Earn 2 points per dollar on gas, travel, taxis, and public transit
  • Earn 1 point per dollar on all other purchases
  • Welcome Offer: 2,500 points every month you spend $500 in your 1st year (total value of $300)

Because the primary cardholder shoulders all the risk for the credit card, you should only add an authorized cardholder if it’s someone you trust to use the card responsibly and pay for the charges they make (or stick to whatever rules you set for their use of the card). While you can add anyone you want as an authorized user, it’s best to leave out anyone who might not use your credit card responsibly.

Last but not least, authorized users technically use someone else’s credit and won’t need to meet any of a credit card’s eligibility requirements. This can come in handy in cases when one cardholder doesn’t have the credit they need to get a card on their own.


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