Authorized Users?

[Anonymous]

I want to ask if i did right. I have 4 credit card

1 BankAmericard Cash Reward ($2800)

1 Amex BCE ($6000)

1 Capital One Quicksilver MC ($1000)

1 Chase Freeom ($2200)

In every card i authorized one of my family.

Dad - Chase

Mom - Bofa

Sister - Capital One

Is this okay? because i want to help them build there credit history and score.

[Anonymous]

---

@Anonymous wrote:

I want to ask if i did right. I have 4 credit card

1 BankAmericard Cash Reward ($2800)

1 Amex BCE ($6000)

1 Capital One Quicksilver MC ($1000)

1 Chase Freeom ($2200)

In every card i authorized one of my family.

Dad - Chase

Mom - Bofa

Sister - Capital One

Is this okay? because i want to help them build there credit history and score.

---

I am going to assume your question is whether it is okay to add family as AUs. This means I am not going to discuss whether the cards you picked are correct or not. Without more information regarding your goals, needs, and spend (both amount and categories) it would be impossible to recommend the best CCs for you. 

Adding family as AUs can be a good or bad decision. It really comes down to your situation, your AUs situations, and the level of trust between all of you. My mom, dad, and sister are all AUs on at least one of my cards. I am fine making them AUs because I trust them and my income and assets are sufficient to handle fairly significant CC debt if one or more of them racks up CC debt on my cards. Moreover, my parents are very financially stable and the risk of them incurring charges on my cards they cannot pay is close to none. My sister could potentially rack up charges she cannot pay as she is in the middle of her doctorate, but none of the cards I have given her have limits I cannot afford to cover. In my situation, adding my family as AUs is fine. 

Ask yourself the following questions:

1) Can you afford to and are you willing to pay off the cards if they are maxed out without hurting your relationship with them? If no, be careful about adding AUs to the card or add them as AUs but don't give them the card. Or give them an Amex AU card and set a low limit for the AU card. 

2) Do they have good financial habits? Are you making them an AU for a bonus? Or for a sister who is in school who you want to add a backdated Amex for? Or are you helping them rebuild? If they had poor financial habits before make sure the cards have low limits or make them an AU but keep the card. 

3) Do you trust them? Even if you can afford to pay and even if they have good financial habits, is it likely they will rack up debts and leave you with the mess? This is sometimes more of an issue with a fiance or a girlfriend where things might turn south, but can sometimes be the case with siblings as well. Unless you trust them, giving them the actual card might not make sense. 

If your answers to the above questions are all yes, make them an AU and give them a card. If any one of them is no, consider the following options: 1) Don't make them an AU; OR 2) Make them an AU and don't give them a card; OR 3) Make them an AU on a card that allows AU controls for lower limits (e.g. Amex). 

[Anonymous]

---

@Anonymous wrote:

---

@Anonymous wrote:

I want to ask if i did right. I have 4 credit card

1 BankAmericard Cash Reward ($2800)

1 Amex BCE ($6000)

1 Capital One Quicksilver MC ($1000)

1 Chase Freeom ($2200)

In every card i authorized one of my family.

Dad - Chase

Mom - Bofa

Sister - Capital One

Is this okay? because i want to help them build there credit history and score.

---

I am going to assume your question is whether it is okay to add family as AUs. This means I am not going to discuss whether the cards you picked are correct or not. Without more information regarding your goals, needs, and spend (both amount and categories) it would be impossible to recommend the best CCs for you. 

Adding family as AUs can be a good or bad decision. It really comes down to your situation, your AUs situations, and the level of trust between all of you. My mom, dad, and sister are all AUs on at least one of my cards. I am fine making them AUs because I trust them and my income and assets are sufficient to handle fairly significant CC debt if one or more of them racks up CC debt on my cards. Moreover, my parents are very financially stable and the risk of them incurring charges on my cards they cannot pay is close to none. My sister could potentially rack up charges she cannot pay as she is in the middle of her doctorate, but none of the cards I have given her have limits I cannot afford to cover. In my situation, adding my family as AUs is fine. 

Ask yourself the following questions:

1) Can you afford to and are you willing to pay off the cards if they are maxed out without hurting your relationship with them? If no, be careful about adding AUs to the card or add them as AUs but don't give them the card. Or give them an Amex AU card and set a low limit for the AU card. 

2) Do they have good financial habits? Are you making them an AU for a bonus? Or for a sister who is in school who you want to add a backdated Amex for? Or are you helping them rebuild? If they had poor financial habits before make sure the cards have low limits or make them an AU but keep the card. 

3) Do you trust them? Even if you can afford to pay and even if they have good financial habits, is it likely they will rack up debts and leave you with the mess? This is sometimes more of an issue with a fiance or a girlfriend where things might turn south, but can sometimes be the case with siblings as well. Unless you trust them, giving them the actual card might not make sense. 

If your answers to the above questions are all yes, make them an AU and give them a card. If any one of them is no, consider the following options: 1) Don't make them an AU; OR 2) Make them an AU and don't give them a card; OR 3) Make them an AU on a card that allows AU controls for lower limits (e.g. Amex). 

---

I told them every purchase they do make sure they have money to pay for it. And isn't it i can monitor there transactions because i'm the primary account holder? And i told them to getbthe receipt for every purchase they do with my cards so i can dispute if something goes wrong. I trust them very much because my parents are the one who taught me to handle money or other financial things. My sister is fine, she won't charge without asking my permission. I just really want to help them build there credit thats why i authorized them for each of my card.

[Anonymous]

I understand you have instructed them to keep receipts and pay you back for their charges. However, at the end of the day if they fail to pay for any reasons (either they can't pay or don't want to pay), you are stuck with the bill. When you make someone an AU and give them the card you become their guarantor. If they charge something and don't pay you, you still owe the CC issuer. 

The way I see it you need to have both the ability to pay the debt and trust in order to give someone an AU card. Without the ability to pay, you will be in trouble if your AU gets in financial trouble. For example, what if they have an emergency car expense and they put it on your card and fail to pay you because of other emergency expenses. You still have to pay the charges. Trust is not always enough because people you trust can sometimes be in situations where they cannot afford to pay you back. You also need the willingness and the ability to take a hit for them. For example, if my sister racked up 5k on her AU card and did not pay me back due to her circumstances, I would be willing and able to cover those expenses for her. The way I see it you need to be willing and able to afford maximum spend by the AU and trust them to use the card as agreed between the two of you. 

[Anonymous]

---

@Anonymous wrote:

I understand you have instructed them to keep receipts and pay you back for their charges. However, at the end of the day if they fail to pay for any reasons (either they can't pay or don't want to pay), you are stuck with the bill. When you make someone an AU and give them the card you become their guarantor. If they charge something and don't pay you, you still owe the CC issuer. 

The way I see it you need to have both the ability to pay the debt and trust in order to give someone an AU card. Without the ability to pay, you will be in trouble if your AU gets in financial trouble. For example, what if they have an emergency car expense and they put it on your card and fail to pay you because of other emergency expenses. You still have to pay the charges. Trust is not always enough because people you trust can sometimes be in situations where they cannot afford to pay you back. You also need the willingness and the ability to take a hit for them. For example, if my sister racked up 5k on her AU card and did not pay me back due to her circumstances, I would be willing and able to cover those expenses for her. The way I see it you need to be willing and able to afford maximum spend by the AU and trust them to use the card as agreed between the two of you. 

---

Yea i know that, i can cover there expenses if that happens. i told them if they do that i'll remove them AU. Is that possible rigjt?

[Anonymous]

Yes, you can always remove an AU. Every issuer has a different process, but usually a phone call is enough. Amex is a little nicer and makes freezing AU cards very easy online. 

[Anonymous]

---

@Anonymous wrote:

Yes, you can always remove an AU. Every issuer has a different process, but usually a phone call is enough. Amex is a little nicer and makes freezing AU cards very easy online. 

---

Yes but AMEX is my primary at the moment so i won't add AU. But do you think the card that i AU them is good enough?

[Anonymous]

---

@Anonymous wrote:

---

@Anonymous wrote:

Yes, you can always remove an AU. Every issuer has a different process, but usually a phone call is enough. Amex is a little nicer and makes freezing AU cards very easy online. 

---

Yes but AMEX is my primary at the moment so i won't add AU. But do you think the card that i AU them is good enough?

---

First, even if Amex is your primary card you can add AUs. The nice thing about Amex cards (issued by centurion bank and not co-branded cards) is that you can set limits as low as $200 for an AU online. 

As far as the other cards being sufficient, the answer is it depends. AU cards can help or hurt the person depending on the cards age, payment history, utilization, and the AUs own credit profile. If the AU card has high utilization it can actually hurt the AUs credit score. If you add someone as an AU to an older card with a solid payment history and low utilization, you will help their score. If you add a new card with high CC debt to someone with an excellent credit score, the AU's score will likely go down. If your AUs have poor credit scores and qualify for nothing more than secured cards, even a new card with high utilization might help their credit profile. 

Anyway to make it short and sweet - Add AUs to a card with a very low utilization of credit and a long payment history for maximum impact to your AUs score. If your AU has high CC debt, a card with high available credit and little to no debt will be most useful. 

[Anonymous]

---

@Anonymous wrote:

---

@Anonymous wrote:

---

@Anonymous wrote:

Yes, you can always remove an AU. Every issuer has a different process, but usually a phone call is enough. Amex is a little nicer and makes freezing AU cards very easy online. 

---

Yes but AMEX is my primary at the moment so i won't add AU. But do you think the card that i AU them is good enough?

---

First, even if Amex is your primary card you can add AUs. The nice thing about Amex cards (issued by centurion bank and not co-branded cards) is that you can set limits as low as $200 for an AU online. 

As far as the other cards being sufficient, the answer is it depends. AU cards can help or hurt the person depending on the cards age, payment history, utilization, and the AUs own credit profile. If the AU card has high utilization it can actually hurt the AUs credit score. If you add someone as an AU to an older card with a solid payment history and low utilization, you will help their score. If you add a new card with high CC debt to someone with an excellent credit score, the AU's score will likely go down. If your AUs have poor credit scores and qualify for nothing more than secured cards, even a new card with high utilization might help their credit profile. 

Anyway to make it short and sweet - Add AUs to a card with a very low utilization of credit and a long payment history for maximum impact to your AUs score. If your AU has high CC debt, a card with high available credit and little to no debt will be most useful. 

---

Wow! Thank you so much for the informations! Now i know what to do, i might add dad on my BOA because thats the longest account and good payment history.