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The Difference Between a Joint Account Holder & Authorized User

written by: randalarias•edited by: Rebecca Scudder•updated: 7/5/2011

Are you liable for the debt on your boyfriend's credit card? What rights do you have to use the account? If you don't know the answers to these questions you probably don't know the difference between a joint account holder and an authorized user.

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    Why you need to know

    Credit Card It's important to know your status on an account because it gives you an understanding as to your responsibility and any liability you have to the debt on the credit card. It's very easy to figure out if you're an authorized user on a credit card or if the account is jointly held, but what's the difference?

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    What is a authorized user?

    Authorized users are like guests on the account because they can make charges onto the account and have their own card but are not liable for any debt. Authorized users have whatever amount of charging priveliges the account holder grants them, although they are not required to pay any of the balance. To find out if you're an authorized user on a credit card, simply call the customer service number on the back of the card and ask them. You can also check your credit report. On the section that lists the accounts, look for a letter before the account information. If you see an "A," you're an authorized user. Add authorized users to your credit card account with caution: they're able to use your account just as you do, although they'll have no liability. Only add someone that you can trust. A very common tactic is to put a lower credit limit on the authorized user's spending. Many credit card companies allow this, especially for people that want to allow their children to be authorized users on their account to teach them responsibility.

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    What is a joint account holder?

    Joint accounts usually require a co-signer and are very different than a credit card with an authorized user. If you're a joint account holder on a credit card you're equally obligated to pay the balance if it goes into default for any reason. You can never be released from the credit card account because you're an equal owner. It's easy to tell if you're going to be a co-signer because you'll need to give your credit history and income along with the other individual on the account. You can find out if you're a joint account holder in the same two easy ways mentioned above. You can try calling customer service, because they're always willing to give you this information. You can also check your credit report. Next to the account information, a letter "J" means you are a joint account holder on the credit card account. You should only become a joint account cardholder with someone you trust and will be willing to pay the account if you can't. You also need to make sure you're always able to pay the balance yourself as well.

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    Credit Impact

    Whether you're an authorized user or a joint account holder, all the credit activity on the credit card will be reported to credit bureaus and go on your credit report. This is why many people sign up to be an authorized user on someone else's account. This can be a great thing if the account is in good standing, although it will end badly for both individuals if the account goes into default and isn't paid. Authorized user accounts, however, are not taken into account when computing your credit score, due to abuse of the system.

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    Ossenfort, Todd. "Authorized user or joint account holder?" 18 May 2008. 13 May 2009.

    Photo credit: Morguefile