CCCs pushing AUs hard, any downside?

[Anonymous]

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@Anonymous wrote:

I've been wondering if applicants get a better chance of approval and/or a higher credit limit if adding an authorized user.

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Can you add an AU at the time of an application?  I always thought they had to be added after.  I don't remember seeing a field to enter in AU info when filling out a CC app, but to be fair I have not applied for a card in years so perhaps things have changed.

[Anonymous]

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@Anonymous wrote:

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Maybe they are pushing AUs more because their revenue stream has hit a snag, thanks to COVID. They understand the additional risk to them granting someone an AU, but they got the rock solid cardholder who cares about their credit and would be willing to pay for any charges the AU makes who might normally wouldn't pay them as an individual cardholder. Revenue has taken a hit and they are looking for additional ways to get more swipes.

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I agree with this and it makes sense.  I guess my question then is are they targeting only rock solid cardholders?  Does anyone have a so-so profile (say, sub 700 scores) and still get hammered by CS / account pop-ups to add an AU today?

[Anonymous]

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@ChargedUp wrote:

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@Loquat wrote:

For the sake of the topic I will say that Bank of America is known to scrutinize AUs a bit harder than most. And by scrutinize meaning they want you to really know the person you're adding. I've read on a few occasions of them shutting accounts down for folks rapidly adding AUs to their account.

Not sure if this is still a thing now as it's been a bit ago that I read such, but something to be mindful of.

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^^^ This is exactly what came to my mind as I read the OP's post. BoA seems especially sensitive to who you add as an AU. My wife is AU on all my cards and none of my lenders have even blinked. I have a couple of my daughters on CFU, BCP, CSP and Savor and I haven't had any issues there either.

Honestly, as long as whoever you add is semi-immediate family, I would think you're ok. The problems seem to mostly come up when adding friends, neighbors, caretakers and other people that you might not necessarily have a household bond with.

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I would go as far to say having a roomate as an AU is OK (especially if you have the same address), or even a neighbor. But having a neighbor as an AU pretty much maxes you out for any more AUs. Three AUs (neighbor + uncle + friend in Montana) will probably get you whacked, but having your two sons and daughter as AUs is probably fine.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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Maybe they are pushing AUs more because their revenue stream has hit a snag, thanks to COVID. They understand the additional risk to them granting someone an AU, but they got the rock solid cardholder who cares about their credit and would be willing to pay for any charges the AU makes who might normally wouldn't pay them as an individual cardholder. Revenue has taken a hit and they are looking for additional ways to get more swipes.

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I agree with this and it makes sense.  I guess my question then is are they targeting only rock solid cardholders?  Does anyone have a so-so profile (say, sub 700 scores) and still get hammered by CS / account pop-ups to add an AU today?

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Good question. Since the account holder assumes more of the risk in an AU situation, if the account holder is more risky to begin with, it could deter the issuer.

[Anonymous]

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@Anonymous wrote:

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Good question. Since the account holder assumes more of the risk in an AU situation, if the account holder is more risky to begin with, it could deter the issuer.

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That's sort of what my thought process was.  Those in this thread that have replied stating that they get "add an AU" prompts, do any of you have a less than great profile?  My profile is overall pretty strong, so my input on this doesn't confirm anything unfortunately other than what CN was saying suggesting strong files are good targets.

[Remedios]

Prompt or question about adding AU is standard, and by no means associated with credit score. It's the "feature", not a privilege. 

You can add AUs on $200 secured card straight out of BK. 

[FinStar]

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@Anonymous wrote:

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@Anonymous wrote:

I've been wondering if applicants get a better chance of approval and/or a higher credit limit if adding an authorized user.

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Can you add an AU at the time of an application?  I always thought they had to be added after.  I don't remember seeing a field to enter in AU info when filling out a CC app, but to be fair I have not applied for a card in years so perhaps things have changed.

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AUs can be input at the time of filling out an application whenever that prompt is available, which is something that most banks offer as an option. 

[Loquat]

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@Anonymous wrote:

That's a good thing if you're able to trust your AUs without question.  Me personally, I think I've been burned too many times in the past.

While not exactly the same thing, but I've co-signed on loans 2 different times for people and have been left stuck with their debt when they stopped paying.  Trust for me as a result is always going to be a hard sell.

Anyone have an opinion as to why CCCs have really been pushing the AU thing so strong lately relative to the past?  I mean, it's always been a positive thing for them in terms of more profitability.  It just seems recently it has been more of a focus than in the past.  As I said in the original post, it's definitely across many lenders, not just anyone in particular. 

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I spent enough summer afternoons at Grandma's as she tuned in daily to Judge Judy to know not to cosign for anyone...EVER!

[FinStar]

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@longtimelurker wrote:

From a lender perspective, I think the only downside of adding an AU (apart from the minute cost of adding a card etc!) is the increased possibility of default, if the AU overspends and the main account holder cannot pay.   But that is a risk on any account, balanced against expected income from swipe fees + any interest charges and annual fees.

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Exactly. 

That said, given the slew of accounts with a majority of banks and CUs, I really haven't really seen [IME] any uptick or pattern indicating a growth with AU requests.  So, AmEx, Chase, FNBO, SYNCB, Fifth Third, NFCU, etc., have been soliciting adding AUs with similar frequency these days as much as pre-COVID 🤷🏼‍♂️  Perhaps some profiles are targeted more than others based on historical data and potential revenue growth. 

[Anonymous]

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@Loquat wrote:

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I spent enough summer afternoons at Grandma's as she tuned in daily to Judge Judy to know not to cosign for anyone...EVER!

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She was smart for sure.  I wasn't.  Lessons learned!