Account access for authorized users can vary among cards

This post originally appeared June 8, 2017 on as “‘6 questions to ask when adding an authorized user to your card

By Barry Paperno

Dear Speaking of Credit,
I have a few questions regarding adding an authorized user to my Chase Sapphire Preferred card, that I can’t seem to find answers to online. My girlfriend needs to begin building her credit score, and I see this as a potential opportunity to help.

1. Do I maintain full access to the account?

2. By adding her, would my “credit limit” of $5,000 increase to $10,000 because of the second card?

3. Will she have to pay an additional annual fee?

4. Will my account receive the miles/points for the money she spends?

5. Can I pay off balances early to maintain below a 35 percent balance to mitigate the title of “risky cardholder” to credit agencies? For example, if 35 percent of $5,000 is $1,750 per month, but we each spent $1,000, can we do it in a way in which the balance is never over $1,750?

6. How do I keep the authorized user’s purchases separate from mine? Does each card have its own separate balance on my account?

Not sure if you can answer all or any of my questions, but I appreciate you taking the time to reply. – Nathan

Dear Nathan,
It’s good of you to help your girlfriend begin to build a credit score. It’s also good that you’re asking these questions now, before adding her to your card as an authorized user.

Not only is it important for both of you to understand what can happen when mixing your finances in this way, but, as you’ll see, different cards offer different options and levels of account access for authorized users.

I’ll try to answer your questions one by one:

1. Do I maintain full access to the account?
Authorized user access can vary widely from card to card. With some, you, the cardholder, can set access levels for the authorized user ranging from limited permissions, such as only making payments or reviewing recent charges, to granting almost all of the same controls over the account that you have.

With most cards, the authorized user cannot close the account, order additional cards or update the bank account information associated with the card. All cards would give you or your girlfriend the ability to easily remove her from the account at any time.

2. By adding her, would my “credit limit” of $5,000 increase to $10,000 because of the second card?
Not automatically. Your $5,000 credit limit will continue to apply to the total card balance, regardless of the number of users.

Your credit limit will only increase if you specifically request a credit limit increase or are scheduled to receive an increase anyway. It would be based solely on your own credit score, card activity and other qualifications.

However, instead of increasing your credit limit, some card companies will allow you to further restrict the amount an authorized user spends on the card.

3. Will she have to pay an additional annual fee?
Probably not. While some of the “higher-end” cards charge a fee for authorized users – either as a single fee for multiple authorized users or a fee for each one added – most cards, including your Chase Sapphire Preferred, won’t charge you anything to add your girlfriend.

Where it could actually pay to add her as an authorized user is via one of the rewards sign-up bonuses offered by Chase and others that, along with adding an authorized user, typically require a minimum purchase amount over the first few months.

(Currently, the Chase Sapphire Preferred card is offering 5,000 points when you add an authorized user and she uses the card within the first three months*. If you opened the account more than three months ago, however, this bonus might not apply to you.)

4. Will my account receive the miles/points for the money she spends?
Among the various cards, rewards tend to be earned without regard to the user. Yet, with most cards, only the primary cardholder is able to redeem or transfer the rewards.

One way adding your girlfriend as an authorized user could benefit you is that her purchases on the card could help you reach any of the spending thresholds that can trigger reward bonuses.

5. Can I pay off balances early to keep my credit utilization below 35 percent to mitigate the title of “risky cardholder” to credit agencies?
You sure can. If you can’t simply limit your spending to that 35 percent utilization target, or monitoring your spending that closely is way too much trouble, you can raise and lower your credit utilization – the amount of credit being used from the total credit available to you – during a billing month without impacting your credit score.

The only requirement is that, in addition to making your minimum payment by the due date for a particular month, you either add to it at that time or make additional payments before the following closing/statement date.

The balance on that date, having been lowered to the desired utilization percentage, will be reported to the credit bureau and used to calculate your credit utilization percentage for that month.

6. How do I keep the authorized user’s purchases separate from mine? Does each card have its own separate balance on my account?
A few card issuers provide statements that list authorized user charges separately from the primary user’s. Unfortunately, Chase isn’t one of them. American Express and Capital One are among those that do.

Most statements simply list a single balance for all charges by all users for the billing month without designating the user.

Of course, there are ways to overcome this combining of charges. Both of you could hang onto the receipts of any purchase you make and compare them to the statement each month. Another option is that each of you make payments to the card for your own purchases as they occur throughout the month.

Finally, as you mentioned in your question, authorized user benefits are rarely available online or spelled out in card agreement fine print. I suggest calling your card issuer before adding any authorized user, to make sure you have the most up-to-date details relevant to your specific situation.

I hope this information will be helpful to you as you help your girlfriend build her own credit score.

(*The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of the offer.)

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