Advantages and Disadvantages of being an authorized user

My Mom authorized me to be a user of her Master Card when I was in college. I only used it when I traveled one summer. I haven't used the card in 3 years but notice that my mother's credit card shows on my credit report. Am I liable for any balance merely as an authorized user? I didn't even have a job at the time I used it. I was a full-time student. I have asked the credit reporting agency if it can be removed from my credit report as it is my mom's account.

As an authorized user on your mom’s credit card account, you are not legally responsible for payment of the debts incurred on that account. Keep in mind that an “authorized user” is different from a joint account holder. An authorized user’s financial status (i.e., your income, financial assets/liabilities and credit history) is not considered by the creditor for purposes of that account. On the other hand, a joint owner’s financial status is considered by the creditor for the joint account. Joint account owners are responsible for repayment of any debts on a joint account.

For credit reporting purposes, credit card companies will often report the history of the account on the authorized user’s credit report. This is in addition to reporting it on the account owner’s credit report. This can be beneficial to the authorized user’s credit rating if the account is in good standing and payments are made on a timely basis. However, it can be disastrous to the authorized user’s credit rating if the account is not well maintained. Even though you are an authorized user and not legally responsible for the debts on the account, the effect on your credit rating and history is similar to that of an account which you own in your own name.

If you no longer need to be listed on your mom’s credit card as an authorized user, you should have your mom contact her credit card company and have your name removed. She should contact them in writing and follow up to make sure that it has been completed properly. You should also check your credit report to ensure that it is reflected properly in your credit report. The account may still appear on your credit history but it should show that you are no longer an authorized user your’ mom’s account.

Removing the account entirely from your credit report may be more difficult. From the credit card company’s viewpoint, it seems fair that the account be reflected in your credit history during the time that you were using the card. However, your mom may be able to request that the activity during the last three years (when you weren’t using the card) be removed from your credit history. I don’t know how receptive they will be or what requirements they may have to accomplish this but it doesn’t hurt to ask. Your mom can also check her credit card agreement for information about her responsibilities when adding and removing authorized users from the account.