With the increasing importance of credit cards, it is now about questioning your finances, if you don’t have one!
But does that mean everyone in your family should have a credit card of their own? Not necessarily!
With the opportunity of easily making someone an authorized user of your own credit account, it might be foolish to struggle for a fresh credit card, if the question is with your child’s first card or anything of that sort.
But letting someone become a secondary credit card user is obviously risky, and you need to be a bit careful from your side too!
What is a supplementary credit card?
As the name defines, a supplementary credit card, also known as an additional credit card, is an extension of your existing credit card, which is to be used by another person!
You must be pretty much intelligent enough to understand that this additional card (extension of the original card) should be used by someone you know! This second user could be your child, your spouse, your mom or dad, or some close friend of yours!
Once you issue a supplementary credit card to someone you know, your credit account’s usability and access become shared. At times, the secondary card can have a credit limit equal to that of the primary card, if not more.
Purchases made on both the cards will be reported on a single bill!
But, one thing is very crucial to keep in mind! The person to whom you will make the authorized user will not be liable for making any credit card debt payments.
An authorized user does not become a joint credit account holder.
So, if you are the primary owner of the credit card, then all payments are your obligation, even the bills of the authorized user’s!
Who can be the best-authorized user of your credit account?
Anyone whom you trust!
Needless to say, many parents help their children to establish their credit profile, by making them authorized users of the parent’s credit cards.
This way, the kids won’t be bound to make payments but will start to understand moderated spending behavior.
So, if you are planning to give your kid a supplementary credit card based on your original credit card, then make sure to put limits on your kid’s expenses.
Once your child becomes an authorized credit card user, the bank will give your child his/her own credit card. After getting a personal card, a child can be easily tempted to make excessive use of the card.
But at the end of the day, you will be getting the bills and not your child!
Therefore it’s better to hand your kid a supplementary card, only for establishing good credit, and not for fun and misuse!
Again, if you and your spouse are worried or troubled because of too many separate credit card bills, then you can make your spouse an authorized user of your card, or vice-versa. This will help you to have only one credit card bill, instead of two separate ones! Or you can also share a credit account with your roomie or any other close friend of yours.
The point is, the authorized user should be one, whom you know very closely, have a good relationship with, and you can trust blindly!
Else drop the idea of making someone your secondary credit card holder!
What is the difference then, between an authorized credit card user and a joint credit card holder?
Both are different from each other in two ways only.
- > When two people take out a credit card together, then once the card is issued, both of them become joint holders of that card.
Each of them is equally responsible for making payments and taking care of the account. However, an authorized user is not responsible for making any payment. But like in a joint account, both the primary and secondary user’s credit profile will be affected due to any missed payments.
- > Secondly, you can’t add anyone as a joint holder of your credit card once the card comes into effect and is ready to use.
So to become a joint account holder, you need to apply for the card together, with whom you want to own the card!
On the other hand, you can make anyone an authorized user whenever you want. There are no set rules and time limit as such.
I Hope this was of some help, if you plan to have someone as an additional user of your credit card, or if you want to have a supplementary credit card from someone!