Many of my clients are married and have credit cards that at least look like they are joint cards. It can be confusing to figure out which of the two of them is obligated on a credit card.
If you have a credit card with someone else, the second person can be either a “joint account ownerr” or an “authorized user”.
An “authorized user” is a someone who is allowed to make purchases using your credit card. Usually that someone has their own card with their name on it. However, they are not legally responsible to pay the account, because they are not the account owner (although if they sign the credit card slip or terminal at the merchant I suppose it is possible the merchant could pursue them. I think that is unlikely.)
If you, as the authorized user, don’t have a credit history, or if you want to improve your score, being an authorized user on someone else’s card might improve your own credit score if you are current and if the card issuer reports to the credit reporting agencies (as most do). This is because the card issuer will report your usage to the credit reporting agency in your name as well as in the name of the account ownerr.
However, as the account owner, adding an authorized user exposes you to the frolics and mistakes of the authorized user. If they go out and have a party on your card, or if you trust them to make the payments on the card and they “forget”, your credit score can be dragged down. Worse, you are legally responsible for the permitted use of your card, so the card issuer can sue you.
If you are the authorized user, and if it is the account owner who is messing up, you can ask to have your name removed from the card.
Minnesota law provides that if you are joint account owners with your spouse “Either spouse may close a credit card account or other unsecured consumer line of credit on which both spouses are contractually liable, by giving written notice to the creditor.” Minn. Stat. 519.05, subd. (b).
If you are in financial trouble, feel free to contact me at 320-252-4473.
