Responsibilities of Primary Credit Card Holders & Secondary Credit Card Holders

These days, you can purchase just about anything or pay for any service with a credit card. Not having a credit card can be a problem for anyone wanting to rent a car, book air travel or a hotel, or pay for items online. If you don't qualify for a card because your credit history comes up short, you can become a secondary cardholder to make purchases and beef up your credit record. If you're the primary cardholder and want to put another party on your account as a secondary cardholder, be aware of your responsibilities.

Primary vs Secondary Cardholders

Your credit score and history enables you to obtain a credit card. Credit card companies might allow you to name secondary cardholders, known as authorized buyers for store credit cards. Some credit card companies issue a secondary cardholder a card with a different number.

While most people name spouses, family members or significant others as secondary cardholders, as the primary cardholder you can name anyone you want, as long as the person is over age 18. Certain credit card issuers allow parents to put minor children on their accounts as secondary cardholders.

Primary and Secondary Cardholder Responsibilities

If you are the primary cardholder, virtually all of the responsibility for paying the credit card debt falls on you, even if the secondary cardholder made most of the charges. In most cases, credit card companies do not check the secondary cardholder's income or credit history. As the primary cardholder, you have already agreed to be responsible for the secondary cardholder's charges or cash withdrawals when you signed the agreement to put the secondary cardholder on your account.

If you are the secondary cardholder, although you might not hold legal responsibilities, you have ethical responsibilities to the person who you lets you use the card. Before becoming an authorized user, clarify the terms of agreement with the primary cardholder. You should pay the primary cardholder on time for your charges, so he doesn't have to go chasing after you for the money. If you're in a financial spot and can't pay your part of the bill, let him know as soon as possible so the two of you can figure out a resolution.

Set Limits for Secondary Cardholders

Just as you have a specific credit limit on your card, set limits for secondary cardholders so you aren't shocked when receiving the bill. The credit card statement might list charges made by primary and secondary account holders separately. Review charges monthly with the secondary account holder.

Don't assume a charge is correct because the other person must have made it. That's a recipe for paying fraudulent charges on your bill. If necessary, set up a credit limit alert with your card issuer so you are notified if charges approach your credit limit.

Warning for Primary Cardholders

If you're the primary cardholder and you default on your credit card, collection agencies might contact a secondary cardholder, but they can't hold that individual liable for paying the outstanding credit card debt. However, the secondary account holder can be negatively impacted because the primary cardholder's default information could be sent to credit bureaus under the name of the secondary cardholder.

If you're a secondary cardholder in such a situation, check your credit history and dispute incorrect information with credit reporting bureaus about debts that aren't your responsibility. Debt collectors might become aggressive; know your rights and tell them you aren't responsible for debts incurred on the primary cardholder's account.

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