Guide to Adding an Authorized User to Your Credit Card

Disclaimer: Though we have done our best to research information regarding this topic, be aware that issuing banks may have unique rules and agreement terms that apply to their particular credit card accounts. Contact issuing banks directly for questions on terms and policies relevant to specific credit card accounts.

What Is an Authorized User?

An authorized user on a credit card account is any person you allow to access your credit card account. Not to be confused with a joint account holder, an authorized user can only make purchases and, in some cases, have access to certain card benefits and perks. Joint account holdership is becoming extremely rare, but typically occurs when two people apply for a credit card together. In joint account ownership, both people are liable for charges and can access and make changes to a credit card account.

An authorized user can be a spouse, relative, or employee. When you designate an authorized user on your credit card account, this person usually gets a card bearing their name with the same credit card number as the primary cardholder. In this scenario, the primary cardholder is liable for all transactions made by themselves as well as by any authorized user tied to their account.

Why Would You Add an Authorized User to Your Credit Card Account?

There are many reasons you might think about designating an authorized user for your credit card account. It all comes down to convenience and extending benefits that a credit account offers: access to credit, related perks, and credit card rewards, as well as the potential to improve the credit score of the authorized user.

For example, couples that share expenses might find it easier to designate one or the other as an authorized user to avoid passing a single card back and forth to make purchases. Perhaps you have a relative who lives far away, and it would be easier to give them access to your credit account for emergency purchases. You may also have a child that you want to assist in building credit history to increase their credit score. Adding them as an authorized user could help with this, but we’ll cover that more in another section.

Additionally, if you are an employer whose employees need to make purchases on behalf of the company, it would make sense to make them an authorized user. Without this designation, it could be extremely inconvenient for them to not have a company credit card at their disposal.

In some cases, adding an authorized user can also accrue reward points connected to a credit card account. These reward points can be used to make purchases or receive discounted pricing on things like travel and retail products. Typically, points are accrued from reaching credit card spending amounts within a certain time frame. Sometimes, the act of adding an authorized user can garner additional rewards as well.

How Can I Add an Authorized User to My Credit Card Account?

As the primary cardholder you are the only person who can designate an authorized user. The authorized user cannot contact the credit card issuer and add themselves to your account. You will have to contact the issuing bank and request to add one or more authorized users to your account.

Depending on the bank and the technology in place, you may be able to handle this process entirely online. Some banks allow you to log in to your banking portal to designate additional authorized users, create their own bank login and profile as well as determine the level of access you’d like them to have to your account. Levels of access can range from being able to view transactions only to making purchases. If your bank doesn’t have this technology in place, usually a phone call is sufficient.

Who Can Be an Authorized User on My Account?

An authorized user can be anyone you choose, whether they are related to you in some way or not. In most cases, the bank will request identifying information such as name, birthdate, Social Security number, and address. Some card issuers require that authorized users meet age requirements, and others do not have age requirements. As always, check with the bank to understand the criteria authorized users must meet for your card.

The Fees

Some credit cards will charge an additional fee for more additional authorized users, while others will offer this benefit at no charge. Make sure you read the fine print in your cardholder agreement so that you are aware of all the fees associated with having one or more authorized users on your account.

Fees can range from less than $100 to a few hundred dollars and beyond each year. Business accounts especially can carry higher fees when multiple authorized users are associated to one account.

Liability

As the primary account holder, you must understand that you are 100% solely liable for any and all charges made on your account by both yourself and your authorized user. If you have been designated as an authorized user, you do not legally share liability for purchases made on the credit card account. However, you may have a personal arrangement with the primary account holder to pay your share of charges when the bill is due.

What Can an Authorized User Do?

This can depend on the level of access you’ve chosen with your card issuer for your authorized user. If there are not varying levels of access to choose from, check with the card issuer to find out exactly what an authorized user can and cannot do.

In most cases, an authorized user cannot make changes to an account. They cannot close an account, request changes in bill due dates, change account information, or request limit increases or a lower annual percentage rate.

Again, this varies from card issuer to card issuer, but there are many other things an authorized user can do.

Here are some possible capabilities based on the terms of your credit card issuer:

  • Make purchases
  • Report any lost or stolen cards
  • Obtain account information
  • Initiate billing disputes
  • Request statement copies
  • Make payments and inquire about fees

Benefits of Adding an Authorized User

As mentioned before, adding an authorized user to a card can be for convenience, accruing rewards, or sharing card perks and benefits. An authorized user can be incredibly convenient in the case that you don’t have your personal card or for some reason don’t have immediate access to it.

Having an authorized user can help a primary user reach limits to earn reward points for some cards. One of the most effective marketing strategies of credit card companies is to offer bonuses and rewards for adding authorized users to your account. Adding another user to your account could add a few thousand extra reward points you would not have earned without adding the user. Then, there’s always the chance that the authorized user will make purchases that contribute even more to your attempt to accrue reward points.

Finally, there are a number of credit cards that offer perks or benefits that can extend to your authorized users. Depending on your credit card, benefits like car rental insurance, lost luggage reimbursement, and extended warranties could apply to all purchases made, including those by your authorized users, on your credit card account.

Benefits of Becoming an Authorized User

Though the credit-reporting landscape is changing, there’s still the potential to “piggyback” on a primary account holder’s credit history for a card in good standing. But not all credit card companies report information to credit bureaus for authorized users in all circumstances. However, to know for sure what will be reported to the credit bureaus in regard to your authorized user status, speak with your card issuer for the details of what information is reported and when to credit bureaus.

Another benefit is having access to more credit. If you are in a bind and have emergencies that come up, access to credit can be helpful. Plus, exercising diligence in managing purchases and bill payment can help you develop good credit habits.

You should also know that being an authorized user may grant you access to certain perks for account holders and their primary users. There are benefits like access to travel lounges, Global Entry or TSA PreCheck application, travel credits, and discounts an authorized user could be privy to as well.

What Could Go Wrong?

If for some reason the credit card account doesn’t remain in good standing, the credit score of both the primary account holder and the authorized user could be affected. If you are a primary account holder, make sure your authorized user understands the terms under which they can make purchases. If they make purchases that cause your payments to be delinquent, your credit score could suffer.

Even if you did not give this person permission to make purchases with your credit card account, the fact that you designated them as an authorized user is evidence that you at some point trusted them with your credit card access. A claim of criminal or fraudulent activity in this instance would be extremely difficult to prove, so choose your authorized users wisely.

Though not as common with an authorized user, your credit score could be negatively affected if an account becomes delinquent. Because tradeline reporting for authorized user accounts to credit bureaus varies from card to card and scenario to scenario, a delinquent account status could still appear on your credit report. If you will be added to someone’s account as an authorized user, find out whether or not the credit history of the account will be reported to credit bureaus under your authorized user status.

Removing an Authorized User from an Account

Either the primary cardholder or the authorized user can remove an authorized user from an account by contacting the credit card issuer. You may be asked to verify your information as well as the information of the primary account holder.

In many cases, only one card number is issued between one or more users. Your credit card company may deactivate the primary cardholder’s credit card number and reissue a new card and number once an authorized user is removed from an account.

If your status as an authorized user does show up on your credit report for the credit account after you’ve been removed from a credit card account, you may have to contact credit bureaus to have it removed.

The Best Way to Manage Shared Credit Access

Designating someone as an authorized user is not something to be taken lightly. Even a small misunderstanding of credit card issuer terms and your own interpersonal credit arrangement can cause problems. Before adding an authorized user to your account, set ground rules around card use that covers access to perks and making purchases.

Some things to consider and discuss with your authorized user include:

  • What is the goal in having the authorized user on the account?
  • Will the authorized user have a physical card?
  • When is it OK to use or not use the credit card to make purchases or access card perks?
  • The credit history of both the primary cardholder and the authorized user
  • Good credit habits that will prevent identity theft and fraud
  • Setting up monitoring alerts with the credit card company or an identity theft protection service

The ability to add an authorized user to a credit card account can be a double-edged sword. On one hand, convenient benefits of access to credit and credit card perks can make life easier in so many ways.

On the other hand, this same convenience can cause problems if both the primary cardholder and the authorized user don’t understand the rules of engagement with each other or the terms set forth by the credit card company.

Adding an authorized user to your account has the potential to be incredibly convenient and mutually beneficial if handled the right way. Make sure you follow best practices to get the most out of this financial arrangement.

The post Guide to Adding an Authorized User to Your Credit Card appeared first on MagnifyMoney.

Dating Someone with Bad Credit? Here’s How to Protect Your Score

These tips can help ensure their bad credit doesn't indirectly affect yours.

Building a strong credit score can take years of paying your bills on time, spending wisely and avoiding too much debt. If you’ve spent a lot of time and effort building a great credit score, you may be very protective of your credit.

But if you’re in a relationship with someone who has poor credit and you’re at a point that you’re moving in together or otherwise sharing expenses, your credit score could be in jeopardy. Not because your Valentine’s bad credit will directly impact yours: Credit reports don’t get merged, even after you’re married. But a person’s poor money habits can have an indirect effect of your financial standing and any joint accounts you decide to sign up for will appear on your credit file.

In other words, if your beloved has bad credit, you’ll want to take steps to avoid damaging your own. Here’s how you can safeguard your credit score from your partner’s bad credit.

1. Consider Keeping Your Funds Separate …

There are a number of reasons your partner could have poor credit, including unexpected financial hardship or identity theft.

“Someone with a low credit score could still be responsible with money and pay all the bills on time, but may just have some unexpected medical debt,” says Matt Gulbransen, owner of Callahan Financial Planning Corporation. But your partner could also have poor money-management skills. And, if that’s the reason for their credit score woes, you may want to keep your bank accounts separate for awhile. You can still split expenses while restricting access to your personal bank account.

2. … the Same Goes for Other Accounts

You can apply the same strategy to other accounts, including credit cards, loans and any accounts with monthly payments. Missed payments on shared accounts will inflict mutual damage to both of your credit scores. Your partner’s poor credit could be due to a history of late payments or accounts in collections, so think twice before sharing. (And, if you do decide to share, keep a close eye on those accounts.)

“I suggest you don’t join credit cards until you build the credit of the other party,” says Gulbransen.

It’s also risky to co-sign a loan, which can have the same impact on your credit as sharing a joint account.

3. Avoid Applying for Credit Together

If you want to apply for a credit card or loan, you may be better off doing so independently. If you apply together, your partner’s poor credit could result in higher interest rates, poor loan terms or even an outright rejection. You should use your own good credit to negotiate the best terms.

“Banks remain wary of making loans to borrowers with tarnished scores,” says Gulbransen. “And low scores can deny one access to a mortgage.”

Even adding your partner as an authorized user on your credit cards can be risky if your partner runs up your credit card balances. That’s because the amount of debt you owe can directly impact your credit scores. (Plus, the primary accountholder is the one responsible for actually paying the bills.)

4. Work on a Credit Improvement Plan

Poor credit doesn’t have to doom a relationship. It can be challenging, but you can help your partner by understanding their situation and working together to create a credit improvement plan.

If you’re both committed to the relationship, you may want to merge finances and share financial decisions in the future. The best way forward is to openly discuss what led to your partner’s poor credit, and come up with a plan to improve it together.

The details of the plan will depend on the factors contributing to your partner’s poor credit score. Improving their credit score for your partner could require monitoring his or her credit report, building a solid history of timely payments and paying down debt. There are also a number of tools, such as secured credit cards that are ideal for people who have struggled with managing their credit. And, if your beloved discovers their credit is being affected by a boatload of errors, credit repair could be an option.

Bottomline: By working to improve your partner’s credit, you can both move toward a greater financial future together.

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The post Dating Someone with Bad Credit? Here’s How to Protect Your Score appeared first on Credit.com.

How Do My Spouse & I Apply for a Credit Card Together?

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Couples can gain several advantages when they decide to manage their finances together. First, they can save time by managing fewer accounts. In addition, each person can leverage their financial strengths for the benefit of the household by saving, budgeting and paying bills. Finally, couples can pool together their income, investments and other resources without having to account for who was originally responsible.

When couples manage their finances, they may choose to apply for a credit card together. However, there are two ways that two people can be on a credit card account.

Opening a Credit Card as Joint Account Holders

One way that two people can apply for the same credit card is as joint account holders. With this type of account, both spouses essentially act as the primary cardholder. Both can make charges, make changes to the account, and redeem rewards. But in addition, both cardholders are individually responsible for the repayment of all debts, regardless of who made the charge. Even if one spouse makes all of the charges but doesn’t pay any of the bills, the other spouse is still responsible for repayment. Furthermore, payment history of the account will be reflected on the credit reports of both spouses.

With a standard checking or savings account, it can be quite easy to simply add a joint account holder. But with a credit card account, it’s not that simple. Only a few banks still offer this option, and in most cases, the account must be originally opened as a joint account — you can’t add a spouse to an existing account.

In 2013, Chase announced it would cease offering joint credit card accounts, and other major banks, such as HSBC and Capital One, have followed. Currently, Bank of America, U.S. Bank and Discover still allow customers to open joint credit card accounts.

Adding a Spouse as an Authorized User

A much easier way for a couple to share a credit card account is for the primary account holder to add a spouse as an authorized cardholder. Authorized cardholders receive their own credit card and can make charges to the primary cardholder’s account. However, the primary cardholder is only responsible for repayment and can remove authorized cardholders from the account at any time. In addition, authorized cardholders are not able to perform many account management tasks, such as reporting a card lost or stolen or redeeming rewards — and not all issuers report authorized users to the three major credit reporting agencies.

Pros & Cons to Both Arrangements 

The advantage of a joint account is that both spouses are equal in the eyes of the card issuer. Each has all of the authority and responsibility that they would have if they were the sole account holder. It’s also possible to open a joint account if one spouse has poor credit and the other has much better credit.

However, if the couple separates or divorces, both spouses are still responsible for repaying the debt, and any negative payment information will be reported on the credit histories of both spouses. And if one spouse should die, the survivor will generally still be responsible for repaying the debt.

When you add a spouse as an authorized cardholder, it also has several advantages and drawbacks. On the plus side, adding an authorized cardholder is simple, and can be done with just a quick telephone call. In addition, other cardholders are not financially responsible for debts, which could be an advantage to the authorized cardholder, or a disadvantage to the primary accountholder, depending on how you look at it. For the authorized user, it can be frustrating to be unable to perform some basic tasks on the account, such as redeeming rewards.

By understanding the different ways that couples can open a credit card account together, you can choose the type of account that works best for your needs. If you’re considering whether to apply for a rewards credit card, be sure your credit is in solid shape beforehand. You can see where your finances stand by viewing a free snapshot of your credit report, updated every 14 days, on Credit.com.

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6 Things to Do Before You Add Someone to Your Credit Card

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Are you considering adding someone to your credit card as an authorized user? Doing so is easy, but it’s not a decision to be taken lightly. An authorized cardholder is free to make charges to your credit card account, but only the primary cardholder is obligated to pay off the debt. Before adding someone to your account as an authorized cardholder, here are six things to consider.

1. Ask If You Are Making the Right Decision

Because you will be required to pay for any charges made by your authorized cardholders, you should carefully consider if it is a good idea. For example, you shouldn’t make your friends or roommates authorized cardholders just so that they could make occasional charges to your account. And while it can make sense to add a spouse or an immediate family member, it’s generally a bad idea to add a more distant relative who you may not know as well.

2. Look Into Alternatives

Before giving someone the authorization to make virtually unlimited charges to your account, you should consider some alternatives. For example, you could use your credit card to purchase prepaid debit cards, also called gift cards, from Visa, MasterCard or American Express. These products offer much of the security and convenience of credit cards while allowing you to limit the amount in advance. Prepaid reloadable debit cards are another option that can offer you the flexibility to track purchases and reload funds. However, these cards will offer few, if any purchase protection policies and may have higher fees.

3. Have a Conversation With the Authorized User

Before ordering a card for the authorized user, the two of you should sit down and lay out some ground rules. For example, you should decide what the purpose of the card is and what types of purchases you expect them to make and not make. If you are adding employees as authorized users to your small business account, you may want to have them agree to a policy in writing.

4. Set Limits

Part of your conversation with the authorized user should include limits on the amount you expect the card to be used for. For example, you could tell the cardholder that you don’t want him or her to make any purchases over $50 without your permission, or to agree not to make more than $100 per month in charges. At the same time, you should always be aware that any agreements between your and your authorized cardholders do not affect your obligations to the card issuer. The primary cardholder is solely obligated to repay all purchases, not the authorized cardholders.

5. Tell Them to Inform You If the Card Is Lost or Stolen

Authorized cardholders only have the ability to make purchases, they cannot manage the account in any way. If one of your authorized cardholder’s cards becomes lost or stolen, then the primary cardholder must report it and request a replacement. Therefore, it’s important to inform your authorized cardholders that they need to contact you immediately if they have a problem.

6. Make Them Aware of Any Fees 

Authorized cardholders may not be familiar with the terms and conditions of your account. And with young adults who are receiving their first credit card, they might not know much at all about how credit cards work. As a result, you should discuss any fees your card may have, such as cash advance fees and foreign transaction fees. In fact, you may wish to set their card’s cash advance limit to zero if you would prefer not to allow your authorized users to use their card to make costly cash withdrawals.

The Bottom Line 

The ability to add someone to your credit card account is a powerful feature, but it’s also one with potential for abuse. By taking a few prudent steps before adding an authorized cardholder, you can be sure that you’ve done everything possible to make this arrangement work.

Remember, before you add an authorized user, it’s a smart idea to see where your credit stands first so you know if anything needs improvement — and whether you can afford to take the risk of adding someone else to your credit. You can view two of your credit scores, updated every two weeks, for free on Credit.com.

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I Don’t Need a Credit Card But Want to Build Credit. What Can I Do?

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Good credit is essential if you hope to borrow money one day for things like a new car or home. But good credit can also be important for smaller things like renting an apartment or even landing a new job. And one of the easiest ways to build the credit necessary for these things is by getting a credit card.

If you have no credit, or even bad credit, and you’re averse to getting a secured credit card to help improve your credit, there are other ways to go about establishing and building good credit.

Here are three other options for building credit and improving your credit scores.

1. Get a Credit-Builder Loan

A credit builder loan is a loan with a set amount you pay back over a set period of time (referred to as an installment loan). Most have repayment terms ranging from six months to 18 months, and because these loans are reported to one or more of the three national credit reporting agencies, on-time payments will help build up your credit.

Here’s how it works: A lender places your loan into a savings account, which you can’t touch until you’ve paid it off in full, allowing you to build credit and savings at the same time. And because loan amounts for credit builder loans can be quite small (just $500) it can be much easier to make monthly loan payments.

Credit-builder loans are best for people with no credit or bad credit. But, if you have good credit but don’t have any installment accounts on your credit report, a credit-builder loan could potentially raise your score since account mix is another major credit-scoring factor.

2. Pay Your Rent 

If you’re in the process of moving or need to do so in the near future, it’s a good idea to find a landlord who reports your rent payments to the major credit bureaus. Depending on what credit report or credit score is being used, these on-time monthly rent payments can give you a quick and easy credit reference and help you qualify for a loan (or at least another apartment down the road).

3. Become an Authorized User

Asking your spouse, partner or even your parent to add you onto one of their accounts as an authorized user could give your credit a boost. If the account they put you on has a perfect payment history and low balances, you’ll likely get “credit” when that account starts appearing on your credit reports. You won’t necessarily need to use the card to benefit from this strategy. It is a good idea to have your friend or family member check with their issuer to be sure that it reports authorized users to the three major credit reporting agencies (not all do).

Remember, one of the most important things in building good credit is making timely loan and bill payments. Bills like rent or utilities may not be universally reported to the credit bureaus, but if they go unpaid long enough, they can hurt your credit, especially if they go into collection. (You can see how any collections accounts may be affecting your credit by viewing your two free credit scores, updated each month, on Credit.com.)

If your credit is in rough shape, due to a collection account or other payment history troubles, you may be able to improve your scores by paying delinquent accounts, addressing high credit card balances and disputing any errors that may be weighing them down. And remember, you can build good credit in the long term by keeping debt levels low, making timely payments and adding to the mix of accounts you have as your score and wallet can handle it.

[Offer: If you need help fixing your credit, Lexington Law can help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More on Credit Reports & Credit Scores:

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How to Kick Your Spouse Off Your Credit Cards

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Is it time to separate the finances between you and your spouse? Some couples manage their finances separately while others manage their bills together. But in both cases, it’s likely that a person will add a spouse to his or her credit card as an authorized user or open a joint account. And while these arrangements can work well, it sometimes needs to be undone.

How Authorized Users Work

When you add a spouse, or any other person to your account as an authorized user, he or she will receive an additional card, and will be able to make charges to your account. As the primary cardholder, you are solely responsible for paying all charges to your account, including those made by authorized users. However, an authorized user is generally not able to make changes to an account, redeem rewards or close the account.

Removing an Authorized User

There are times that you will want to quickly remove your spouse as an authorized user, such as in cases of divorce or separation, in order to avoid being responsible for their charges. When you added your spouse as an authorized user, you mostly likely contacted your credit card issuer to do so, and removing an authorized cardholder is usually just as easy.

Generally, you can simply call the number on the back of your credit cards and request that the authorized cardholder’s account be removed immediately. You will then be instructed to destroy the cards as well as contact any biller that has the card on file. As a courtesy, you can also notify the cardholder that their card has been removed from your account.

“If a customer would like to remove an authorized user from their account, they need to either call Capital One customer service number or log into our online servicing to request the change,” a spokesperson for Capital One said in an email. 

How Joint Accounts Work

A joint account is an arrangement where two people share the status of primary account holder, and both have complete authorization to make any change to an account that a primary account holder would. Additionally, both joint account holders are individually responsible for the repayment of all debts. Many credit card issuers no longer permit joint accounts, although some still do.

Removing a Joint Account Holder

Generally, either party can unilaterally close the account by contacting the card issuer over the phone or in writing. Once closed, the cards of both joint account holders and any authorized cardholders will be deactivated, and any future attempt to make purchases will be declined. Nevertheless, both joint account holders will still be individually responsible for paying off any remaining balance under the terms existing at the time the account was closed.

Streamlining Your Credit Cards During Divorce or Separation

Unfortunately, divorce and separation often lead to credit problems, as financial obligations can fall through the cracks. But it doesn’t have to be that way. Here are some tips that can help you to organize your finances and help keep your credit score intact.

After both spouses have been removed as authorized users from each other’s accounts or joint accounts have been shuttered, it’s time to take inventory of which remaining credit cards you have. Once you have that list, you need to contact each card issuer and make sure that they have your current mailing address so that you can receive your statements.

It’s also important to immediately check the balance of each account and find out when the next payment due date is. To avoid making late payments, you can set up automatic withdrawals from your bank account, or initiate automatic payments to your credit card issuer. Most credit card issuers also allow you to create payment alerts via email or text messages. Finally, you should consider changing your payment due dates to be more convenient for your needs. For example, some credit card users prefer to have their payment due date shortly after they receive their paycheck, so that they can use those funds to make a credit card payment. You could also consider closing any unused credit card accounts, in order to minimize the number of payments you have to keep track of.

Coping With Debt During Divorce

If you find that you have credit card debt in your name from purchases made by your ex-spouse, you should contact your divorce attorney to ensure that these charges become part of the negotiations. But while your divorce is being finalized, you can avoid credit card interest charges by transferring your existing balances to a new account with a 0% APR promotional balance transfer offer. These cards can offer you a break from incurring credit card interest, often for 15 months or longer. However, nearly all of these cards impose a 3% balance transfer fee on the amount transferred. (You can check out the winners of our recent ranking of the best balance transfer credit cards here.)

Going through a divorce is also a crucial time to monitor your credit. You can get a free annual credit report at AnnualCreditReport.com; you can also get a free credit report snapshot, updated every 30 days, from Credit.com. By carefully separating your credit card accounts and streamlining your finances, you can minimize the expense and credit score hit often associated with the unwinding of a marriage.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More on Credit Reports & Credit Scores:

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4 Expensive Credit Card Add-Ons You Can Avoid

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Sure, you might want a picture of your adorable dog on your credit card, or maybe that adorable photo of you and your fiancé on vacation, but is it worth the money?

If you have great credit and are already paying off your credit card balances in full every month, that extra expenditure (nominal, to be sure) can make perfect sense if it makes you happy each time you pull your card out of your wallet.

But what if you’re thinking about personalizing that secured card you just got to improve your credit? Or what about other charges that you may or may not know you’re opting into? Some of these add-ons and upcharges offered by credit card companies might be best to avoid. Here are five credit card add-ons and how you can keep from being charged for them.

1. Express Pay Option

Some credit card issuers offer this service for an extra fee.Essentially, by giving the issuer an extra $10 or so along with your monthly payment, you’re paying to have access to an increased available credit limit more quickly (one business day versus three or four business days after you make a payment).

As with many of these kinds of offers, it’s a revenue generator for credit card issuers, particularly those who service cardholders with subprime credit.

“You see more of that stuff in the subprime world because they don’t have the same sort of revenue capability that some of the other card issuers do,” said Thomas Nietzsche, a credit educator with ClearPoint Credit Counseling Solutions. “Those lower credit limit cards really have to be creative with how they make money.”

Instead of paying extra to make sure you have access to a larger available balance more quickly, you may want to try paying down as much of your balance each month as you can. Putting that extra $10 toward your balance is generally a far better use of the money than is making sure you can access more of your credit limit a few days sooner.

2. Credit Card Insurance

This option isn’t as heavily pushed by card issuers as it was many years ago, due in part to some legal actions that found credit card insurance coverages to be questionable at best.

Most debt protection plans are expensive and confusing. They cost money in direct upfront payments, and even when they do pay out, they cost extra money in deferred interest payments. Besides, each plan has its own loopholes and exclusions that the issuer can sometimes use to avoid paying any benefit at all. The solution in most cases is to not sign up in the first place.

“There have been cases where the company the creditor was contracting with wasn’t actually providing any services at all,” Nietzsche said.

If you have high credit card debt, or you worry you may soon experience a big drop in income, you may decide that a debt protection plan is right for you. If so, get and read the terms of the insurance yourself. Make sure that it covers a job loss or medical problem you might actually experience.

And if you do it, you’d better be expecting calamity sometime soon. Paying $3,000 for a paltry $10,000 in maximum benefits shows just how quickly the expense of these products can stack up. The sooner the disaster, the bigger the financial payoff for the consumer.

3. Adding an Authorized User

Most credit cards will allow cardholders to add authorized users at no additional charge, but some high-end rewards cards charge a fee for each additional cardholder. The ability to add an authorized cardholder is a nice benefit to have, but it is not without risk. By understanding the advantages and liabilities, cardholders can more wisely consider granting another person access to their line of credit.

4. Receiving Paper Statements

Some issuers charge $1 to send paper statements, and it’s not always clear that you’re being charged for this “extra” until it shows up on your statement. To avoid this upcharge, ask the company directly if they charge for paper statements, or forgo receiving them altogether. And always check your statement for charges like this, as well as fraudulent or erroneous charges.

One of the most important things you can do when it comes to your credit cards is to monitor how your payment history and credit utilization are impacting your credit scores. A poor credit score can be downright expensive — potentially tens of thousands of dollars over the course of a lifetime. (We even made a calculator so you can see just how much you’re losing to bad credit.)

You can track how your credit card balances and payment history are impacting your credit by getting your two free credit scores, updated monthly, on Credit.com.

More on Credit Reports & Credit Scores:

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How to Get Removed as an Authorized User on a Credit Card

sick credit

Becoming an authorized, or secondary user, on another person’s credit card can be a good way to build or rebuild credit. The account’s information is often added to your credit file, which can help establish a credit history. The increased credit available to you may decrease your overall utilization rate, which can also boost your credit score.

However, being an authorized user can have a negative effect as well. If the primary cardholder doesn’t pay a bill on time, or owes a lot on an account, your credit could be hurt as a result. Even when that’s not the situation, authorized users may want to get taken off an account if their relationship with the primary cardholder changes.

Requesting The Removal

To request your removal as an authorized user on a credit card account, you’ll usually need to call the card issuers. Only Bank of America and BarclayCard allows authorized cardholders to request a removal online.

You’ll need to verify the account’s information, which often involves answering a security question or knowing personal information about the primary cardholder. Once you do so, almost all the card issuers allow authorized cardholders to remove themselves from an account. Only at Citi might a secondary cardholder not have the clearance to request the removal.

In general, you can’t make other changes to an account or request the removal of other authorized cardholders.

Card Issuers’ Contact Information

If you’re a secondary cardholder at one of the following financial intuitions, you can call the number listed below to request your removal from an account. Expect to answer several identification and verification questions, although the specific questions vary by issuer.

American Express: Authorized users can remove themselves from an account by calling the customer service line at 1-800-528-2122. You need to provide your name, card number, and answer a security question or have the account’s security pin. 

Bank of America: Authorized users can remove themselves from an account online or by calling the customer service line at 1-800-732-9194. You will need to answer security questions that were created by the primary account holder, such as the city they were born in, their first car, or their mother’s maiden name.

BarclayCard: Authorized users can remove themselves from an account online or by calling the customer service line at 1-888-232-0780. You will need to provide the account number and two of the following: the primary cardholder’s date of birth, Social Security number, mother’s maiden name, or home phone number.

Capital One: Authorized users can remove themselves from an account by calling the customer service line at 1-800-227-4825. You need to provide the card’s number and the primary cardholder’s name and date of birth. 

Chase: Authorized users can remove themselves from an account by calling the customer service line at 1-800-432-3117. You need the card number and primary account holder’s mother’s maiden name, or the account’s password. 

Citi: Authorized users can remove themselves from an account by calling the customer service line at 1-800-347-4934. You need to provide your name, the primary cardholder’s name, and the security word of the account. With Citi accounts, you may not have the clearance to make changes to the account even if you’re an authorized card user. If this is the case, the primary cardholder will need to request your removal. 

Discover: Authorized users can remove themselves from an account by calling the customer service line at 1-800-227-4825. You need the account number and zip code of where the bill is mailed, or the primary cardholder’s Social Security number.

Kohl’s: Authorized users can remove themselves from an account by calling the customer service line at 1-855-564-5748. You will need to verify the account by providing your card number, name, and date of birth.

Follow-Up with the Credit Bureaus and Card Issuers

Getting yourself taken off an account may only be the first step depending on your end goal. If you’re requesting a removal because the primary cardholder’s activity has hurt your credit, or you want the line of credit off your credit file for another reason, you may need to call the credit bureaus or follow-up with the card issuer.

After getting removed from the account, new activity shouldn’t be added to your credit file. Depending on the issuer and bureau, the entire credit line might automatically be taken off your credit report or the credit line remains with a marker that your relationship with the account was terminated. If the account remains, previous positive and negative marks will remain on your credit file and may affect your score.

Even when the process is automatic, it may take 30 to 60 days for your authorized user account to get taken off your credit report. Wait a month or two and then request a free copy of each of your three credit reports from AnnualCreditReport.com. If the credit line is still there, you can then follow-up with the credit bureau and file a dispute asking them to take the account off your file.

The post How to Get Removed as an Authorized User on a Credit Card appeared first on MagnifyMoney.