Adding Authorized users to Credit card?

Question

I am thinking of adding someone o my account. Can you answer these questions?

If I add an Authorized user. Can they remove themselves from the account, or does the Account holder need to put in a request via phone or web system?

If I add an Authorized user. What are their responsibilities to the account? Such as are the held liable if the account holder cannot pay the min. balance.

What is the difference of a authorized user and a joint account?

If the Authorize user does not pay their portion of the bill can this be claimed as fraud on the account?

Answer 1

- It depends on the credit card company, but some will allow the AU's to remove themselves.

- AU's are not responsible for the charges on the account. They are simply authorized to make purchases. A joint account holder IS equally responsible for the charges.

Answer 2

I wouldn't bother adding anyone.  FICO is making a major change to the FICO credit score formula. This was announced by Fair Isaac Corporation earlier this week. FICO scores will no longer factor authorized user accounts into their credit scoring formulas.

People that are listed as authorized users on credit card accounts will likely see a significant change in their credit scores when this modification takes place later this summer.

For most consumers, this change will have a negative impact on their credit scores. Only consumers who are listed as an authorized user on negative accounts or accounts that have balances that are close to the credit limit will possibly see an increase in their credit scores.

Adding a family member or friend as an authorized user on an existing credit card account has long been used as a way to establish credit. Many parents added their children as authorized users in order to help them build their credit history.

However, credit repair organizations have also started using this system as a way to fraudulently sell authorized user account access to consumers with credit problems. This credit repair loophole was part of the motivation for the FICO score change.

Hope this answers your question

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