Do authorized users build credit?

Yes, teens should have credit cards because having one is the most efficient way to build credit history. Plus, credit history will come in handy as teenagers get older. Knowing how to handle a credit limit and reaching financial independence from an early age is a bonus. A significant number of parents agree, too. Nearly 20% of teenagers ages 13-17 have credit cards, according to a TransUnion survey.... read full answer

Key things to know before giving a credit card to a teenager:

• Add them as authorized users: The only way someone under 18 years old can get a credit card is by becoming an authorized user on an adult’s account. While there is no legal minimum age requirement for an authorized user, some credit card issuers have their own age requirements.
• How to build credit: Credit card companies do report to credit bureaus about authorized users, which builds credit history.
• Bill payment responsibility: The primary cardholder takes on the responsibility of paying whatever debt ends up on the card, regardless of who is using the account as an authorized user. Parents who are thinking about adding their teen as an authorized user should set some rules for the card, and make sure those rules are enforced. After all, if a minor wreaks financial havoc as an authorized user on your credit account, you’re stuck with the bill.
• Setting ground rules: Some credit card companies make it easy for primary cardholders to monitor spending and create boundaries for authorized users. American Express consumer credit cards allow cardholders to set spending limits as low as $200 for each authorized user. The Barclays mobile app allows primary cardholders to customize spending limits per transaction, with the option to turn certain spending categories on or off.
• Benefits of getting a credit card as a teen: Teenagers who get credit cards before they’re 21 years old, either as an authorized user on someone else’s account or on their own after they turn 18, tend to have better outcomes. They’re more likely to have a higher credit score later on in life, and are less likely to default on financial obligations in the future, according to an University of Wisconsin study. Becoming financially literate is increasingly important in our modern world, and early exposure to the credit system can pay dividends.

When they turn 18, a teenager has the opportunity to apply for their own credit card, granted they have their own independent income. Many 18-year-olds have limited or no credit history, so they may be limited to a student card or a secured card. Some student cards have rewards beneficial to students, like statement credits for good grades. And they generally come with better terms than cards offered to non-students with limited credit history.

To remove an authorized user from a credit card, call the customer service phone number on the back of your card or make the request through your online account. You can also mail your request to the issuer, though it would be much slower. Either the primary cardholder or the authorized user can request removal. ... read full answer

You will need to provide the card number, the primary cardholder’s name, and the authorized user’s name. Some credit card companies require other info such as the primary cardholder’s date of birth, Social Security number, or the answer to a security question.

How to Remove an Authorized User From a Credit Card

• Over the phone: Call the number on the back of your card and provide your card number to identify yourself. When you speak with a representative, tell them you’d like to remove an authorized user.
• Online. Go to the account management page. Find the section for authorized users, select the user you’d like to remove, and confirm removal. Most credit card issuers allow you to remove authorized users online.
• Via mail. Some issuers also allow you to remove an authorized user by mail. Just note that this method is the slowest. Use certified mail if you’d like confirmation of receipt.

Most credit card companies allow either the primary cardholder or the authorized user to request removal. Just note that an authorized user cannot remove another authorized user from a credit card. You should also keep in mind that the specifics of removing an authorized user vary by credit card company.

Ways to Remove an Authorized User with Major Credit Card Companies

It is also worth noting that the primary cardholder can remove an authorized user for any reason. However, there are a few common ones that tend to arise.

Common Reasons for Removing an Authorized User

• Decision to take control of one’s own debt without others making purchases
• Divorce or separation
• The authorized user has built up a decent credit history and can now qualify for a card of their own
• Termination of employment of a worker who is listed as an authorized user on a business credit card account

After you remove an authorized user from a credit card, make sure the user knows. That way, they won’t be surprised when they try to use the card and are unable to purchase anything.

What to Watch Out for After an Authorized User’s Removal

Once you remove an authorized user from your credit card, the card’s past payment history, whether negative or positive, will usually remain on the authorized user's credit report. But no new activity from the card will be added. The authorized user may contact the credit bureaus to ask them to remove the history. It is also worth noting that the authorized user’s credit score could either improve or drop slightly when they are removed from a credit card, depending on the situation.

Most credit card issuers will remove an authorized user immediately after the request is made. In the meantime, some issuers will allow you to freeze the authorized user’s card or set its spending limit to $0 through your account settings.

Legally, there is no minimum age for an authorized user on a credit card. That’s because authorized users aren’t entering into any kind of contract or borrowing money in their own name. But some credit card companies have their own requirements. Barclaycard along with American Express authorized users must be at least 13 years old, for example, while Discover requires authorized users to be at least 15 years old. The minimum age requirement for authorized users 16 years old for PNC Bank, while Wells Fargo and Synchrony requires authorized users to be at least 18 years old. None of the other 15 largest credit companies have minimums, though. You could make a newborn an authorized user on your account if you want to. ... read full answer

No matter how old the authorized user is, adding one is an important decision. On the one hand, it’s a great way for a young person to build credit before they’re old enough to qualify for their own account. But on the other hand, the primary accountholder has to be comfortable assuming responsibility for any charges the authorized user makes.

Here’s the minimum age for an authorized user on a credit card:

• Chase: No minimum age
• Bank of America: No minimum age
• Citibank: No minimum age
• American Express: 13 years old
• Capital One: No minimum age
• Discover: 15 years old

• Wells Fargo: 18 years old

• S. Bank: No minimum age

• Barclays: 13 years old

• Synchrony Bank: 18 years old

• USAA: No minimum age, but minors under 18 cannot view the account online. To be eligible for membership, you or a family member must have served in the armed forces.

• Navy Federal Credit Union: No minimum age To be eligible for membership, you or a family member must have served in the armed forces.

• PNC Bank: 16 years old

• TD Bank: No minimum age
• First National Bank of Omaha: No minimum age

If you’re worried about an authorized user being irresponsible with your account, several banks allow you to manage your user’s access to credit. For instance, you may be able to set individual spending limits or get alerts when the user makes new purchases. Sometimes, you can even make it so that all purchases must be approved by you before they go through. That way, you can give someone young experience with credit while still laying down restrictions.