Is an Authorized Cardholder Liable for Credit Debt?

Listing someone as an authorized user rather than adding them as a joint holder to the account gives them complete access to a credit card, but without the liabilities. In certain states and if you have a spousal relationship, you may be liable for someone's credit card debit no matter the status of the account.

Identification

Authorized users are not liable for credit card debt, according to BankRate.com. Unlike a joint account, authorized users can legally use the card, but not make changes to the agreement. Collections agents, however, may still try to convince an authorized cardholder to pay credit card debt, especially when the primary holder dies.

Effects

The primary and authorized cardholder's credit histories become linked when on the same card. If the primary holder does not keep up with payments on the card, the authorized user's credit score will go down, too. This also means that a positive history benefits the authorized user as well.

Community Property Law

Eight states have community property laws that give assets and debt to both spouses in a marriage. (Wisconsin has laws similar to community property states.) Debt only transfers to a spouse---listed as either a joint owner or authorized user---if it was accrued during the marriage for the benefit of both parties. If, for instance, a husband buys a boat the wife never uses, then the wife would not bear responsibility for debt on the boat.

Warning

Before adding someone as an authorized user, you should decide whether you trust this person with your line of credit. An authorized user can max out your credit cards and might not protect your card's information as carefully as you, which could lead to identity theft or fraudulent charges.