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Benefits and Costs of Adding Additional Cardholders on Credit Cards

by on April 9, 2014 · 17 comments

in American Express, Barclays, Beginners Series, Capital One, Chase, Citi, Credit Cards, US Bank

Readers often ask me about the perks and downsides of adding cardholders to existing credit card accounts, and I’ve explored the answers in posts like:

Time for a round of applications? Here are some great current offers.

There are a lot of great reasons to add an authorized user to your credit card

However, I thought it was time to take a look at this landscape as a whole and clearly define the pros and cons associated with adding cardholders. There are some great reasons to add a cardholder, but doing so should be undertaken with caution. The benefits can be a real advantage to those trying to maximize their points banking, but the corresponding fees and possible penalties should absolutely be factored in to your decision.

Here are the pros, cons, benefits and fees you’ll need to consider before you add a cardholder to your account:

PROS

Earning points for another person’s spend. Adding a cardholder to your credit card account means that you can bank the points they earn with their own spending. If you choose a card with transferable points like American Express or Chase, you can then transfer points to the additional cardholder’s frequent flyer/guest accounts.

An easier time hitting spend thresholds. Since the spend from additional cards go towards spend on the main account, you’ll have an easier time reaching the required spend levels to access valuable awards like the British Airways “Travel Together” companion ticket or the 10,000 EQM’s the Citi Executive AAdvantage World Mastercard gives you for spending $40,000 in a calendar year.

A credit-challenged spouse/partner will have access to credit and points. If a spouse or partner isn’t credit worthy enough to apply for their own card, making them an additional cardholder allows them a chance to rebuild their credit and simultaneously earn points. Likewise, adding a child as an additional cardholder can be a great way to build up their credit history and therefore their credit score so that when they want to apply for their own credit cards, they have a better chance.

If an additional cardholder is credit worthy, they could still get their own card. Being an additional cardholder doesn’t preclude someone from applying for their own card (the same one they’re an additional cardholder on) and banking their own sign-up bonuses.  

Two cards, four potential bonuses. If you’re part of a couple, remember that you can each get your own separate cards for two larger bonuses (providing you can each meet the spend threshold), then add each other as authorized users for additional point bonuses when those exist.

Main credit score factors

Adding an authorized user can help them build their credit history and thus boost their credit score over time

CONS

Fees. Before adding a cardholder, I always recommend looking carefully at the exclusions in the Terms and Conditions of the card’s application page. In general, adding authorized users is free, but some cards charge annual fees to add cardholders (like the $175 charged by Platinum American Express card – see below), some of which can weigh against the advantage of points bonuses.

It’s your credit on the line. If an additional cardholder neglects to pay their bills, you’re responsible for their spending – so be sure you familiarize yourself with the spending and bill-paying history of the person you’re adding. This can be especially challenging with charge cards like the Chase Ink Bold that need to be paid off in full every month. Don’t be afraid to ask to see a potential cardholder’s account statements – reversing a bad credit history will be much harder than starting this conversation.

Specific Fees and Benefits

Individual cards charge specific fees for adding cardholders, but many also offer special benefits. Here are the fees and benefits of some of the most popular points-earning credit cards on the market right now.

Know what you're getting into when you add an authorized user.

Know what you’re getting into when you add an authorized user

American Express

Premier Rewards Gold: There is no annual fee for up to 5 additional cards. The annual fee for 6 or more additional cards is $35 for each card. No extra benefits, but having additional cardholders can help hit the $30,000 calendar year spend threshold (and thus earn 15,000 bonus points) faster.

Business Gold Rewards: Introductory annual fee of $0 for the first year; then $50 for the first Business Gold Rewards Card and no fee for the rest. No additional benefits, but same benefits as primary cardholder with OPEN discounts.

Platinum: $175 for up to three additional cards then $175 per card after that. Additional cardholders get Airport Club, Airspace Lounge, Priority Pass and Centurion Lounge access, a $100 credit for Global Entry/TSA Pre-Check (when the $100 application fee is charged on the additional card) and SPG Gold status, but the calendar year $200 airline rebate is take from charges off all the cards in the same account, so individual authorized users do not get their own airline rebate.

Business Platinum: $300 fee for each additional Business Platinum card. Additional cardholders get Airport Club, Airspace Lounge, Priority Pass and Centurion Lounge access, a $100 credit for Global Entry/TSA Pre-Check (when the $100 application fee is charged on the additional card), SPG Gold status and OPEN savings and discounts. But the calendar year $200 airline rebate is take from charges off all the cards in the same account, so individual authorized users do not get their own airline rebate.

EveryDay Preferred: $0 to add an authorized user, no additional benefits.

Starwood Preferred Guest: $0 to add an authorized user, no additional benefits.

Delta Reserve: $175 per additional card, and no limit to the number of additional cards that can be requested. Additional cardholders have access to Delta SkyClub Lounges and 24/7 concierge services, but in order to receive a baggage fee waiver and priority boarding, they must be traveling with the primary card member. On or after May 1, 2014, the Delta Reserve Card Member will have complimentary access and be allowed up to two guests per visit at a discounted rate of $29 per guest and any additional guests at the standard rate

BARCLAYCARD

Arrival: $0 to add an authorized user, no additional benefits.

Hawaiian Airlines World Elite Mastercard: $0 to add authorized user, no additional benefits. Only primary cardholder gets free checked bag, one-time 50% companion discount on roundtrip coach travel between Hawaii and North America, and anniversary $100 off coach companion ticket.

Capital One

Venture: $0 for up to five additional cards, no additional benefits.

CHASE

Consumer Cards

Sapphire Preferred: $0, and new applicants get a 5,000-point bonus when they add an authorized user within 3 months and make a purchase.

Sapphire: $0, and new applicants get a 2,500-point bonus when they add an authorized user within 3 months and make a purchase.

Freedom: $0, some offers include $25 cash back for adding an authorized user and making a purchase within 3 months. $1,500 cap on quarterly 5% cash back bonus applies to all cards on the same account.

Business Cards

Ink Bold: $0 and authorized users have reported getting their own annual lounge passes and Lounge Club membership.

Ink Plus: $0 and authorized users have reported getting their own annual passes and Lounge Club membership.

Airline Cards

British Airways Visa: $0, no additional benefits, but a good way to get extra spending to earn the “Travel Together” Companion Ticket.

United MileagePlus Explorer: $0 for additional cards, 5,000 bonus miles when you add an authorized user within 3 months and make a purchase. Card benefits like free first checked bag, priority boarding and 2 annual United Club passes apply only to primary cardholder and companion on same reservation.

United Club Card: $0, but only primary cardholder and travel companions get United Club access, free first and second checked bag, Premier Access, close-in booking fee waiver, any seat any time award availability, Hyatt Platinum status, Avis First membership, etc.

Southwest Premier Visa: $0, no additional benefits, but the extra spending can help toward earning Tier-Qualifying Points (1,500 for every $10,000 in purchases up to 15,000 points per calendar year) and Companion Pass qualification.

Hotel Cards

Marriott Premier Visa: $0, no additional benefits, though the spending can help earn 1 elite credit per $3,000 spent.

Ritz-Carlton Card: $0 for additional cardholders. Authorized users are eligible for their own Lounge Club membership, Gold Elite status only for primary cardholder, as is $200 annual airline reimbursement (all users on the account draw from same rebate cap). Three annual Club Level upgrades is total for primary cardholder and authorized users.

IHG Rewards Club Select Mastercard: $0, no additional benefits, automatic Platinum status for primary cardholder only.

CITI

Citi Platinum Select AAdvantage MasterCard: $0, no additional benefits, only primary cardholder and travel companions gets benefits like free checked bags, priority boarding, etc.

Citi Executive AAdvantage World Mastercard: $0, no additional benefits and only primary cardholder and travel companions gets Admirals Club membership and earns up to 10,000 EQM’s when you make $40,000+ in purchases in a calendar year (but having an authorized user can help you hit that threshold faster), as well as other benefits like first checked bag free and enhanced airport experience.

Citi Hilton HHonors Reserve: $0, no additional benefits – all the perks like automatic Gold status and Diamond status if you hit $40,000 calendar spend go to the primary cardholder, but having an extra user can help you rack up the purchases faster.

ThankYou Premier: $0, no additional benefits.

US Bank

Club Carlson Premier Visa: $0, no additional benefits, and those the card confers like automatic Gold Elite status are for the primary cardholder.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • Ben

    And what about US Airways Barclaycard?

  • PHLF

    Not sure what they offer at this point if you add a cardholder, but in terms of the cons listed above, I have an additional cardholder on my USAir Barclaycard account and their spend appears on my statement (no second statement is issued to the other cardholder).

  • Flyerdoc

    My friends 25 year old son was still an additional cardholder on their Amex account. When he went to apply for a mortgage, because at that moment his parents had a $10,000+ balance (which they pay in full monthly), his credit got dinged for having a high balance. It was going to impact his mortgage rate which was a huge issue. I never realized it could create such a mess for our kids!

  • KP

    TPG: if i added my wife to the Citi Executive AA 100K offer and she spent $10K on that card, she would get another 100K miles?? Confused, because it never asked for her AA mileage number

  • DG

    TPG: I’m thinking of having my fiance sign up for the Chase Sapphire Card where I get a bonus 5K points for the referral and if she spends $3K in a month, she’ll get the 40K bonus points. My question is can we link up our accounts considering were about to get married and combine her bonus points with my existing points with Chase?

  • Karen SC

    Is the additional cardholders credit pulled?

  • thepointsguy

    No- generally not and if it is, it would be a soft inquiry to verify identity and not a hard pull when you apply for a new credit account

  • thepointsguy

    Yes you can combine UR points – just go to manage points-combine points

  • thepointsguy

    No- she would need to get her own card to get an additional bonus

  • http://www.petegilligan.com Pete

    One other card to call out–on the Citi Prestige card additional cards are $50, but an additional companion ticket comes with each additional card + that user is eligible for the 15% off discount other tickets via Spirit.

  • John Pherrin

    Is the additional card holder “earning” or building their credit?

  • Chad

    Is the 5,000 mile bonus good for the MileagePlus Explorer Business? Or just the personal card?

  • apage

    I think it’s important to note the distinction between “Authorized User” and “Supplementary Cardholder”. Authorized users get a card with the same credit card number as yours. So if your child or spouse looses their card,or there is fraud, the entire account has to be replaced. With a Supplementary Cardholder, they get their own credit card number that can be swapped out only when they loose theirs.

  • shay peleg

    10k on a non charge card? wow

  • NYCBK123

    TPG: I’m thinking of applying for the Chase Sapphire Preferred and want to add one of my parents as the authorized user to get the 5,000 point bonus. There would be no spending other than the one charge necessary to the bonus. Assuming I, as the primary cardholder, pay on time and don’t carry a balance and the authorized user makes no further charges, are there any potential negative effects to either of us (I’m thinking credit rating). Thanks!

  • thepointsguy

    Not that I’m aware of- other than the risk of your addtl cardholder spending on it without your consent (which does not seem likely in this situation!)

  • thepointsguy

    They may benefit from the age of the account… Otherwise the credit line is not in their name so they likely won’t build much credit

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