Credit cards are useful tools. They allow you to buy items at times when you don't have cash readily available. They can make traveling easier and provide many other conveniences; however, they're tools that come with responsibilities. Specific responsibilities are generally listed on your cardholder agreement. The cardholder agreement is the document with the fine print that comes with the initial card or arrives with each yearly update. To be a responsible card holder, be sure to:

• Repay creditors as you agreed to when accepting the card
• Charge only what you can repay
• Monitor your monthly statement for accuracy
• Report inaccurate charges immediately

If you decide to provide access or share credit with family and friends, be aware of your options and the pros and cons of taking this step.

Joint accounts are accounts in which two people are equally liable (or responsible) for the charges and payments to be made on the account. Joint accounts are usually held by married couples. When accounts are held jointly, the information on repayment is reported to the credit bureaus in each cardholder’s name. This means you can be held responsible for your co-cardholder’s purchases and cash advances. In a joint account, each person may have their own card and only one name might appear on it, but both parties are still responsible for it.

An authorized user is someone who has the privilege of using a credit card without the legal liability to repay the charges made. Authorized users do not sign the credit card application indicating they accept the credit card and the responsibility of repaying it. The credit card may even contain the authorized user’s name.

As the credit card owner, you may designate authorized users at any time. When applying for a credit card, there is typically a blank space on the application for authorized users. If you already have the card and want to add an authorized user, contact your credit grantor. They may accept a telephone request or require a written request. Some security measures will be in place to prohibit strangers from becoming authorized users on your credit cards.

Common examples of authorized users are:

• Teenagers
• College students
• Business associates
• Unmarried significant others

For example, let’s say you have a son or daughter going off to college, working a new job in another town, or on vacation, and you don’t want them handling lots of cash. You might want them to use your credit card for emergencies or for big items like motel rooms, or college books. In these cases, you have authorized or given them permission to use your card and they can sign the receipt when they use it, but you are the one responsible for paying for everything charged on the account.

Being an authorized user doesn't help establish your credit history even though you might be the only person responsible for sending in the monthly payment. If you're an adult and want to establish a good credit rating, get a credit card in your name only.

Take a look at the agreements for your credit cards to verify the status of any joint credit card holders or authorized users. This ensures you know who's legally responsible for the payments.

This article is one in a series about credit cards. For further information, see our related articles in the Library section.

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