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As a parent, you want to give your children every advantage and opportunity you can to help them be successful later in life. At some point, perhaps, you’d probably appreciate it if your kids stopped treating you as the “Bank of Mom and Dad” and instead learned how to effectively handle their own finances. To get other banks to take them seriously, your kids need good credit scores. A good credit score can help them get hired, determine where they live and affect their access to affordable funding. Adding your kids as authorized users on your credit cards may seem counterintuitive to the concept of financial independence, but it offers one way to help them learn financial responsibility, build their credit scores and continue the conversation about money all while helping them prepare for a future of financial independence. Find The Best Credit Cards For 2022No single credit card is the best option for every family, every purchase or every budget. We've picked the best credit cards in a way designed to be the most helpful to the widest variety of readers. What Is an Authorized User?An authorized user is someone who has charging privileges on a credit card account. Some credit cards also provide authorized users with many of the same benefits the primary cardholder receives. Although the credit card’s history may report to the authorized user’s own, separate credit profile, an authorized user is not legally responsible for the debt—the primary cardholder is. Joint Account vs Authorized User: What’s the Difference?A joint account is an account where two or more people are legally responsible for a debt. Mortgages, auto loans or credit cards can all be held jointly. In most cases, a joint account holder can’t be removed from the debt unless it’s refinanced or approval is given by the creditor, who will likely want to see if the new primary account holder can handle payments on his or her own. By comparison, an authorized user can be removed from a credit card at any time relatively easily. Pros and Cons of Adding an Authorized UserThere are many reasons why you might consider adding your children as authorized users on your credit card. Keep in mind there are potential consequences for both you and your children once they’re added. 6 Reasons to Add Your Kids as Authorized Users
6 Reasons Not to Add Your Kids as Authorized Users
How to Add Your Child as an Authorized UserAdding an authorized user is usually a straightforward process. Contact your bank or card issuer by calling them at the phone number written on the back of your credit card to begin. Some issuers allow cardholders to add authorized users through an online dashboard. How do I add my child as an authorized user?Adding your child as an authorized user is the same as for anyone else. Every bank requires different information when adding an authorized user to credit cards. Be ready with the following information about your child in case your bank asks:
How to Remove Your Child as an Authorized UserAs your children grow up and start to build their own credit, you may want to remove them as authorized users. But you may not want to rush it. Because your credit card may have a larger line of credit and longer credit history, consider keeping your kids as authorized users for a couple of years after opening their first accounts. This will allow your account to give their scores a boost while their accounts build up their own history and expand their credit limits. When you’re ready to remove your child as an authorized user, call your bank at the number on the back of your credit card. Some banks allow you to remove authorized users online or by submitting a secure message through online banking. Because you and your child’s credit card number may have been the same, consider asking the bank for a new card number. This will prevent your child from making future charges. Credit Card Act of 2009The Credit Card Act of 2009 increased cardholders’ rights and set stricter standards on card issuers to cut down on abusive practices. Successful directives include transparent marketing to allow for easier card comparison, clearly written terms and conditions and monthly statements to provide information on interest rates, length of time required to pay off balances and more. The Card Act protects young cardholders by restricting deceptive marketing practices on college campuses and putting in place more regulations for cardholders younger than 21. Card Act of 2009 Effects on Young AdultsThe authorized user strategy for young adults became even more important with the passing of the Card Act of 2009. This law made it harder for people under the age of 21 to receive approval for personal credit cards because it required them to be able to document an ability to repay the debt independently. Since many college-age children don’t have jobs, they could either become authorized users or have parents co-sign for them. Adding your children as authorized users is the preferable strategy because as a parent you can control the account. As a co-signer, the only way to be removed from the obligation is to close the credit card or prove financial independence of the new solo account holder. Note that not all banks allow co-signers on credit cards. Cost of Adding Your Child as an Authorized UserSome credit card issuers charge for every additional user—especially on those card accounts with annual fees. Some credit cards allow authorized users for no additional cost. Call the number on the back of the card or contact the issuer online to find out what the cost will be to add your child as an authorized user. Consider Setting Some Ground Rules for Your ChildSetting some ground rules with children before letting them use authorized user credit cards is always a good idea. Make sure you’re both on the same page about what your kids can and can’t use the credit card for. Here are some topics to discuss:
Also, be sure to talk about what happens if they don’t follow the rules. Will you take their credit cards away or restrict their purchases somehow? Your child does not necessarily need to use the authorized user credit card or even have possession of it for it to build their credit history. You can add their names to a card and hold onto the physical authorized user cards to prevent any mishaps. Keeping cards away from your child doesn’t help them build good credit habits or provide access to funds in an emergency—it only creates credit profiles for them. To help them build good habits while limiting your exposure, ask your credit card issuer about setting lower credit limits on the authorized user cards. Not all banks offer this feature, but some card issuers—like American Express—do. With American Express, each authorized user has a separate credit card number from the primary cardholder. This makes it easy to determine which purchases were made with which card. Bank Rules About Children as Authorized UsersThe ability to add a child as authorized users depends on age and the bank’s rules. Children who are 18 and older can be added as authorized users without issue. Some banks may not allow children under a certain age to be added as authorized users. Below are the minimum age requirements for some of the most popular banks. Bottom LineAdding your child as an authorized user on your credit card is like handing your child a hammer. If a hammer is used properly, your child can safely and responsibly hang up a picture. If used carelessly, your child can break an heirloom. Make sure your child is ready for the responsibility of being an authorized user before you proceed. Find The Best Credit Cards For 2022No single credit card is the best option for every family, every purchase or every budget. We've picked the best credit cards in a way designed to be the most helpful to the widest variety of readers. Frequently Asked QuestionsDoes being removed as an authorized user hurt your credit?Not always. If the primary cardholder’s credit history is giving the authorized user’s credit a boost, try waiting before removing him or her from the account. Once the authorized user has his or her own established credit history, it will most likely be safe to be removed without experiencing a ding to the authorized user’s credit score. Can an authorized user take over a credit card?An authorized user cannot typically take over the primary cardholder’s credit card. Authorized users are allowed to make charges and sometimes remove themselves from an account, but they don’t have ownership rights of the primary account. Will adding my child as an authorized user help his or her credit?Yes, adding children as authorized users can help their credit scores. It’s up to the primary cardholder to maintain a healthy credit score so the authorized users can reap the benefits. It’s also important to teach children responsible spending habits so they don’t negatively affect the primary cardholder’s credit score. How old do you have to be to be an authorized user on a credit card?Some card issuers have minimum age requirements as low as 13 years old while others have no minimum at all. Call the number on the back of the card to inquire about a minimum age requirement for authorized users. How do I add an authorized user to my Bank of America account?You can add a Bank of America authorized user either online or by phone at (800) 421-2110. All you need is the individual's name, date of birth, Social Security number and phone number. There is no minimum age for a Bank of America authorized user, and all BofA cards have $0 annual fees for authorized users.
Can you add an authorized user to a checking account?To add an authorized signer to an account, both you and the individual will usually need to go the bank to fill out an application and provide proper identification. There may be other conditions or terms specific to your bank, so it's best to inquire in advance.
Can I add someone to my Bank of America account over the phone?Bank of America makes it easy to add an authorized user to your credit card account. You can add someone over the phone by calling customer service, but it's even easier to do online. You just need the authorized user's name, birth date, Social Security number and phone number.
How many authorized users can I have Bank of America?Bank of America Authorized User Bonus by Card
The bonus is available for adding up to two authorized users.
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