topic Re: Ethics of adding authorized user in Credit Cards

Ethics of adding authorized user

creditconcept — Tue, 25 Aug 2015 00:57:18 GMT

Hello All,

I have a question. First, some background. My credit profile is healthy and I have 5 revolving accounts reporting as in good standing.

Now, I have a close family member who has atrocious credit (417 Fico). Is it legal to add them as an AU to all 5 of my accounts but not issue them a card? Is this ethical? Does this change the reporting of the accounts on MY report (individual, jouint, AU....etc)? And lastly, will this actually impove their credit score or will creditors disreguarde the accounts since they are AU?

Thanks guys!!

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 01:07:28 GMT

@creditconcept wrote:
Hello All,

I have a question. First, some background. My credit profile is healthy and I have 5 revolving accounts reporting as in good standing.
Now, I have a close family member who has atrocious credit (417 Fico). Is it legal to add them as an AU to all 5 of my accounts but not issue them a card? Is this ethical? Does this change the reporting of the accounts on MY report (individual, jouint, AU....etc)? And lastly, will this actually impove their credit score or will creditors disreguarde the accounts since they are AU?

Thanks guys!!

It's certainly legal as well as ethical to add someone as an AU. It won't change the way your card(s) report on the credit bureaus. As to whether it will help, that's very hard to say. At the least it can't hurt and may end up improving their scores somewhat. Smart move not to give them the card.

Re: Ethics of adding authorized user

SunriseEarth — Tue, 25 Aug 2015 01:09:59 GMT

@creditconcept wrote:
Hello All,

I have a question. First, some background. My credit profile is healthy and I have 5 revolving accounts reporting as in good standing.
Now, I have a close family member who has atrocious credit (417 Fico). Is it legal to add them as an AU to all 5 of my accounts but not issue them a card? Is this ethical? Does this change the reporting of the accounts on MY report (individual, jouint, AU....etc)? And lastly, will this actually impove their credit score or will creditors disreguarde the accounts since they are AU?

Thanks guys!!

No, you don't have to provide an AU a card. Many people prefer not to do this, so as not to put themselves at risk. You wouldn't see any changes to your report (unless your AU contributes to your balances or payments). It could improve the AU's credit score, but it depends on quite a few factors. It'd be a bit hard to say without knowing more about your profiles.

Some creditors disregard AU accounts (IIRC, Chase is one), but others include them in their scoring.

As for ethics, I really think only you can decide what you consider "ethical". I personally see no ethical issue, since you are ultimately responsible if the AU were to get one of your cards. I doubt most members here would see an issue. Most important is how you feel about it.

Re: Ethics of adding authorized user

kdm31091 — Tue, 25 Aug 2015 01:10:17 GMT

Do bear in mind that even if you don't actually give them a card, once they are an AU they can theoretically call up and get a replacement card mailed to their address.

As far as ethics...I don't see how it's unethical. It will help their credit history (if yours is good, anyway), and it won't hurt you.

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 01:17:47 GMT

@creditconcept wrote:
Hello All,

I have a question. First, some background. My credit profile is healthy and I have 5 revolving accounts reporting as in good standing.
Now, I have a close family member who has atrocious credit (417 Fico). Is it legal to add them as an AU to all 5 of my accounts but not issue them a card? Is this ethical? Does this change the reporting of the accounts on MY report (individual, jouint, AU....etc)? And lastly, will this actually impove their credit score or will creditors disreguarde the accounts since they are AU?

Thanks guys!!

Why would it EVER be illegal?

Re: Ethics of adding authorized user

CreditCuriosity — Tue, 25 Aug 2015 01:36:10 GMT

@kdm31091 wrote:
Do bear in mind that even if you don't actually give them a card, once they are an AU they can theoretically call up and get a replacement card mailed to their address.

As far as ethics...I don't see how it's unethical. It will help their credit history (if yours is good, anyway), and it won't hurt you.

gotta disagree with the bolded.. AU's accounts for the majority if not all the lenders goto the primary card holders addresses and AU's probably don't even have access to re-order cards either.

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 01:42:29 GMT

it's your account, you can add the president as AU if you want to (I mean... if he asks you to add him for whatever reason, and you're okay with it). If you don't trust the AU to be responsible with the cards, then you don't have to give him/her the cards.

my CSP is an AU card from my brother's account, and I actually have the card with me because he knows I won't go shopping spree with the card, he told me i could use it in case of emergency... although I wonder if coach's having semi annual sale is considered emergency?, plus I nagged him until he added me as AU and gave me the card because I wanted a metal card

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 01:45:08 GMT

I have an AU for my cards in my English name, and an tempted to have one like..Homer Simpson or..Madonna..just to see if the people who swipe my card really pays attention to my name or not.

Kinda like when you order at KFC and they ask for your name

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 01:52:05 GMT

Add them as AU, but don't give them the cards or tell them, it can only improve their score over time.

- Homer

Re: Ethics of adding authorized user

UncleB — Tue, 25 Aug 2015 02:00:55 GMT

@CreditCuriousity wrote:
@kdm31091 wrote:
Do bear in mind that even if you don't actually give them a card, once they are an AU they can theoretically call up and get a replacement card mailed to their address.

As far as ethics...I don't see how it's unethical. It will help their credit history (if yours is good, anyway), and it won't hurt you.

gotta disagree with the bolded.. AU's accounts for the majority if not all the lenders goto the primary card holders addresses and AU's probably don't even have access to re-order cards either.

In my experience, *both* of you are correct.

If an authorized user calls a credit card company and tells them a card is lost/defective, they will mail it USPS to the billing address on file (the primary card holder).

However, if the AU is traveling (or tells the CSR they are) there are issuers that will overnight a new card to you regardless of where you are. American Express specifically is also known to have locations in larger cities (usually travel agencies) that have the proper equipment to create a new card on the spot. This would work for the AU the same way it would work for the primary account holder.

Re: Ethics of adding authorized user

CreditCuriosity — Tue, 25 Aug 2015 02:26:53 GMT

@UncleB wrote:
@CreditCuriousity wrote:
@kdm31091 wrote:
Do bear in mind that even if you don't actually give them a card, once they are an AU they can theoretically call up and get a replacement card mailed to their address.

As far as ethics...I don't see how it's unethical. It will help their credit history (if yours is good, anyway), and it won't hurt you.

gotta disagree with the bolded.. AU's accounts for the majority if not all the lenders goto the primary card holders addresses and AU's probably don't even have access to re-order cards either.
In my experience, *both* of you are correct.

If an authorized user calls a credit card company and tells them a card is lost/defective, they will mail it USPS to the billing address on file (the primary card holder).

However, if the AU is traveling (or tells the CSR they are) there are issuers that will overnight a new card to you regardless of where you are. American Express specifically is also known to have locations in larger cities (usually travel agencies) that have the proper equipment to create a new card on the spot. This would work for the AU the same way it would work for the primary account holder.

Assume you woud have to get the primary holders permission.. Back 20-25 years ago or whatever when I was an authorized user on my parents Amex gold card I was able to go down and pick it up at an Amex travel agency I believe and they made it on the spot, of course my parents had to approve me picking it up if I recall corectly. I guess it depends on lender as well. Every card I have says AU user accounts will be mailed to primary card holders address, granted if say my sister was AU on my Amex or CSP I probably could call them and authorize them to send her a card in Fiji or wherever she might be.. Kinda getting off subject though of ethics.

Re: Ethics of adding authorized user

UncleB — Tue, 25 Aug 2015 02:46:00 GMT

@CreditCuriousity wrote:
@UncleB wrote:
@CreditCuriousity wrote:
@kdm31091 wrote:
Do bear in mind that even if you don't actually give them a card, once they are an AU they can theoretically call up and get a replacement card mailed to their address.

As far as ethics...I don't see how it's unethical. It will help their credit history (if yours is good, anyway), and it won't hurt you.

gotta disagree with the bolded.. AU's accounts for the majority if not all the lenders goto the primary card holders addresses and AU's probably don't even have access to re-order cards either.
In my experience, *both* of you are correct.

If an authorized user calls a credit card company and tells them a card is lost/defective, they will mail it USPS to the billing address on file (the primary card holder).

However, if the AU is traveling (or tells the CSR they are) there are issuers that will overnight a new card to you regardless of where you are. American Express specifically is also known to have locations in larger cities (usually travel agencies) that have the proper equipment to create a new card on the spot. This would work for the AU the same way it would work for the primary account holder.

Assume you woud have to get the primary holders permission.. Back 20-25 years ago or whatever when I was an authorized user on my parents Amex gold card I was able to go down and pick it up at an Amex travel agency I believe and they made it on the spot, of course my parents had to approve me picking it up if I recall corectly. I guess it depends on lender as well. Every card I have says AU user accounts will be mailed to primary card holders address, granted if say my sister was AU on my Amex or CSP I probably could call them and authorize them to send her a card in Fiji or wherever she might be.. Kinda getting off subject though of ethics.

I would never assume that... in my experience years ago with being an AU myself, I never had to get permission to get a new card (and certainly not to report one missing). Actually, I was told by one CSR (I believe Chase) that I could do anything the primary account holder could do, except close the account - that required the primary account holder to be on the phone/write a letter. I even would call in to authorize payments to be made from the primary's checking account... and I didn't have to 'pretend' to be the primary - they knew it was 'me'.

I agree, this is getting off-subject of the ethics of adding an AU, but I still think it's an excellent point to bring up that when you add an AU, you are permitting that person to have some level of control over your account (that would be the authorized part of authorized user).

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 02:48:59 GMT

Illegal? No. You're a great person for doing this. I myself, would not. Hubby of many, many years, yes. Anyone else, no. Just me.

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 03:12:05 GMT

I recently did this for my brother, add him as an AU on my Cap1 QS (for the history since it's over two years) and to my NFCU Flagship for the high limit. When I told him I was doing this he told me to not even send a card, which was nice of him to say... He doesn't need to know I wasn't going to anyway lol, but still nice of him to suggest it first

Re: Ethics of adding authorized user

gibeon — Tue, 25 Aug 2015 04:11:20 GMT

Does this close relative have income? I ask, because it would do (much) better for their credit scores to just open a few secured cards (and for them to use the cars responsibly).

There are several that don't even require credit checkschecks, and minimal deposits. Open Sky, SDFCU, etc.

Being an AU on good cards is great for utilization, but it won't help much if their CRs are otherwise buried. Good tradelines will helphelp immensely though.

If you can trust them not to take advantage of their AU status (take "their" new card out for a test drive) then go ahead, but their score isn't going to move much until they work on their direct credit. (I learned this through personal experience...)

Re: Ethics of adding authorized user

Anonymous — Tue, 25 Aug 2015 05:00:38 GMT

@creditconcept wrote:
Hello All,

I have a question. First, some background. My credit profile is healthy and I have 5 revolving accounts reporting as in good standing.
Now, I have a close family member who has atrocious credit (417 Fico). Is it legal to add them as an AU to all 5 of my accounts but not issue them a card? Is this ethical? Does this change the reporting of the accounts on MY report (individual, jouint, AU....etc)? And lastly, will this actually impove their credit score or will creditors disreguarde the accounts since they are AU?

Thanks guys!!

How old are your "5 revolving accounts reporting as in good standing?"

Re: Ethics of adding authorized user

ddemari — Tue, 25 Aug 2015 05:05:00 GMT

OP- adding the users to your account is a nice thing on your part. There is nothing wrong or deceptive about doing it.

Re: Ethics of adding authorized user

bada_bing — Tue, 25 Aug 2015 05:42:30 GMT

How much AU status helps depends on several factors.

The age, CL, payment history and utilization of the card account matters.

The credit report of the AU matters a lot. AU status will help a (re)building

profile, maybe quite a bit, but it won't do much for trashed credit.

I have been helping my 25y.o. neice repair/build her credit for about a

year. I added her as AU on my BoA AkAir and my BCP. Both are

over 20 years old, currently have $50K limits averaging 1~2% utilization

and perfect PIF history for 20 years. The effect on her credit was pretty

noticable. She gets several unsolicited CapOne pre-approvals in the mail

per week and at least one Freedom or Slate pre-aproval per week. Up until

the AU accounts reporting, she had to go thru runaround for secured cards.

4 months ago I sponsored her for NFCU membership and set up a 5 year

shared secured loan. Between the shared secured loan and the AU cards,

that's about all I can do for her but it seems to be working very well.

One thing about having an AU added to your account is that it will make your

billing address appear as an address on the AU's credit report. I receive all

kinds of unsolicited offers at my billing address for my neice now. I don't like

junk mail, so that is a down side. It does allow me to see some of the effects

of the credit build

Re: Ethics of adding authorized user

vanillabean — Tue, 25 Aug 2015 05:55:12 GMT

Being an authorized user means you are authorized to use the card. If the primary card holder doesn’t pass on the card to the intended user, it would violate the purpose for which the card was issued. It would contradict the spirit of the whole business transaction. The intent of the card issuer was never for the primary card holder to withhold the card, which could be seen as a breach of contract, a violation of the whole premise for issuing the card. Such piggybacking is viewed as a loophole, and even FICO 08 has taken steps to limit such behavior. No, of course it’s not unethical or illegal, lol. Just call up the card issuer and ask!

Re: Ethics of adding authorized user

bada_bing — Tue, 25 Aug 2015 06:06:21 GMT

@Anonymous-own-fico wrote:
Being an authorized user means you are authorized to use the card. If the primary card holder doesn’t pass on the card to the intended user, it would violate the purpose for which the card was issued. It would contradict the spirit of the whole business transaction. The intent of the card issuer was never for the primary card holder to withhold the card, which could be seen as a breach of contract, a violation of the whole premise for issuing the card. Such piggybacking is viewed as a loophole, and even FICO 08 has taken steps to limit such behavior. No, of course it’s not unethical or illegal, lol. Just call up the card issuer and ask!

The Amex CSR that took my application for an AU card for my neice recommended

I didn't give her the physical card when I explained the intent and my concerns. At least

Amex seems to have no problem with it and will even recommend it.