What’s the difference between a co-signer and an authorized user?
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Update: Some offers mentioned below are no longer available. View the current offers here.
One of the easiest ways to help a child or family member build credit history is by adding him or her as an authorized user on one of your credit cards. This can establish a record for that person with the credit reporting agencies if he or she doesn’t already have one, plus increase important credit score factors like the average age of accounts and overall credit utilization. But being an authorized user isn’t the same as being a co-signer on the credit card account. Here’s what you need to know about the differences.
The difference between an authorized user and a co-signer
An authorized user (AU) is another person who is authorized to make charges to your credit card account. You’ll receive a card in the mail with that person’s name on it, but when that person uses the card, the charges will show up on your account — and you’re also responsible for paying the bill.
A co-signer, on the other hand, is a shared responsibility. Just like co-signing for a student loan, the account would be opened in the name of your child or family member, but you are both equally responsible for any amounts charged to the card. While the bank will generally only come to you for payment if the primary cardholder doesn’t pay, it legally has the right to demand payment from you without asking the primary cardholder first.
Credit card issuers that allow co-signers
While federal law prohibits banks from issuing credit cards to anyone under 21 unless the person has a co-signer or enough income to pay off the card, most banks haven’t chosen to allow co-signers on credit cards. There are only three major national banks that allow co-signers on credit card accounts: Bank of America, U.S. Bank, and Wells Fargo. Fortunately, there are some useful cards available from these three banks.
Bank of America offers the Alaska Airlines Visa Signature® credit card, which offering of 50,000 bonus miles, plus an annual Companion Fare from $121 ($99 fare, plus taxes and fees from $22) after spending $2,000 or more on purchases in the first 90 days of account opening, although for an applicant with limited credit history, you might end up with a lower-tier card that offers a smaller sign-up bonus and no companion fare. You might instead consider the Bank of America® Premium Rewards® credit card, which comes with an annual airline incidental statement credit (worth up to $100) worth more than its $95 annual fee, or keep it simple with a no-annual-fee Bank of America® Customized Cash Rewards credit card.
The Wells Fargo Propel American Express® card (card no longer available for new applicants) is a great no-annual-fee card that earns 3x points per dollar on useful categories such as travel, dining, gas stations and select streaming services. You’ll also get cell phone protection (up to $600, with a $25 deductible) if you pay your cell phone bill with the card.
From U.S. Bank, the U.S. Bank Altitude Reserve Visa Infinite Card is a solid premium card option, but if you need a cosigner, getting approved for a Visa Infinite card (which generally requires a minimum $10,000 credit limit) is likely to be an uphill battle. U.S. Bank Cash+™ Visa Signature® Card might be a better option. The information for the U.S. Bank Altitude Reserve has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Issues to consider before becoming a co-signer
In some ways, being a co-signer is a natural next step to help a child or family member build credit by opening an account that person is responsible for, rather than simply riding along on your account. On the other hand, it’s a bigger risk on your part — while it’s fairly easy to place limits on an authorized user card or revoke access entirely, it’s much harder to place restrictions on an account that partially belongs to someone else.
Being a co-signer is also a long-term commitment: by default, you’ll be responsible for the card and have it show up on your credit report for as long as the account is open. While some banks will remove a co-signer after certain conditions have been met (for example, once the primary account holder has established a good payment history and sufficient income to support the card), your ability to remove yourself from the account without shutting it down depends on the bank’s policies and discretion.
Co-signing for a card can also interfere with your own credit card applications when banks have restrictions like the Chase 5/24 rule that make approval for new cards conditional on how many accounts you’ve opened recently. While we know it’s possible to get around this requirement when authorized user accounts make seem you ineligible, convincing a representative that a co-signed card shouldn’t count against you is likely to be more difficult.
If you’re trying to help someone boost their credit, being a co-signer for a credit card application can make a big difference. However, it’s also a significant risk, since you’re then responsible for a credit card that you don’t completely control. In most cases, it’s best to start by adding the other person as an authorized user on some of your cards — the person will get a credit score boost while also enjoying some of the premium benefits your cards offer, while you maintain full control of the accounts you’re responsible for. After he or she has proved the ability to handle your cards responsibly, you can consider being a co-signer if the person still can’t get a card without an assist.
Featured image by Maskot/Getty Images.
Updated on 9/08/21
Welcome to The Points Guy!
Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees