If you have a credit card, you may have heard the term “authorized users.” But what is an authorized user?

An authorized user is anyone who you allow to use a credit card that belongs to you. You can make anyone an authorized user, but the most common authorized users are family members and employees. Why would you make a person an authorized user? There are two reasons why.

First, it makes it easier for a business to manage money. If you are a business owner and you send an employee on a long business trip, that employee will have to pay for many things while he or she is away. You can make that employee an authorized user on a company card so that he or she can pay for any expenses during the trip. The employee does not have to use his or her own money, save the receipts, and wait for you to reimburse the balance.

Second, it allows families to protect each other financially. Some people will make family members authorized users on their credit cards to support them or to ensure that they have a source of credit in case of an emergency. It is also a good way to help their kids build their credit in a safe way.

The downsides to having an authorized user are minor. You are still responsible for whatever happens with the credit card and you are the one that still has to pay the balance. However, your credit will suffer if the authorized user spends more than the credit limit on your card. Therefore, it is important to set up some ground rule. Your authorized user should understand the conditions where he or she can and cannot use your credit card. If he or she is not willing to follow the rules, you can remove them as an authorized user.

If you have any other questions, please feel free to contact us. We provide credit repair services throughout St. Louis and the surrounding areas, including but not limited to, St. Charles, St. Peters, Wentzville, and Herculaneum.