Authorized user

What is an authorized user?

An authorized user is any person that you grant permission to use your credit card account. Authorized users can be added to bank accounts and loans for withdrawing, depositing and transferring funds to and from your account.

Deeper definition

You can designate any person to be an authorized user on your credit card accounts or bank accounts. However, for many financial institutions to recognize the individual as an authorized user on an account, the institution or lender asks for specific information as it did the original account holder.

Some of the requested information for a person to be recognized as an authorized user include:

  • First and last name.
  • Date of birth.
  • Legal address.
  • Social Security number.

You have the option to have credit cards printed with your selected authorized users’ names on them. This is an option that many parents or guardians select when having college-age students that move away to attend school.

Unlike joint account holders, authorized users are not responsible for paying the bill on your credit card or loan account.

Authorized user example

Tom and Mary Williams own a marketing company. The couple have joint credit card accounts to help pay for the necessities of operating their business. Tom is the primary account holder.

Due to their need to travel for business, the couple agrees to designate their employee, Justin Woods, as an authorized account holder to pay the business expenses with the credit card while they are away from the office. Woods uses the credit card to make personal purchases without permission.

When Tom and Mary find the credit card statements showing that Woods used the card for personal shopping, they contact the credit card company to fight the charges. The credit card company informs the Williams that they are responsible for making the payment even if they didn’t approve the charges before they were made.

When asking why they are responsible for fraudulent charges, the Williams are told that while a joint account holder can be held liable for charges that are made on an account, authorized users are not responsible to make the payments.

Do you know how to safeguard your joint checking account?

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