It is better to be an authorized user then a joint account holder on any credit card!

It is common to add names of loved ones on credit cards. Your name may be added by someone offering you the privilege to spend.  However, you should always find out your correct status on before accepting such offer.  Accepting the invitation blindly may bring you many troubles.

Usually you are happy to have your name added on someone’s credit card account.  Well you have a credit card to spend and you may think it is coming without any responsibility also.  Everything goes well if the original cardholder is a financially disciplined person, paying his dues promptly.  However, if he is in trouble, you may be dragged with him for a number of consequences depending on your status.

If you are an authorized user, your name is just added to use that credit card.  Of course you will be issued a separate credit card but the statements will go to the original cardholder.  He is responsible for the payment from time to time. You may not even sign the application for including your name. You have a right to use the card and you also have the option to remove your name from such card anytime.  If new original cardholder makes any delays in payment, it will not affect your credit report. This is the safest situation.

If the original cardholder submits your details as a joint cardholder, that is entirely a different story.  In that case, you are equally responsible for all the actions of the original cardholder.  Everything goes well so long as the dues are paid on time. However, if the payments on the credit card are delayed, you will get a hit on your credit score as a joint cardholder. The collections agencies will send you notices and if the original cardholder files bankruptcy, you will also be required to be present for a meeting with the creditors and you will be required to work with them as well as the attorney to negotiate the payment plan. The fact of bankruptcy will remain on your credit report also for a period of seven years.

If you are offered by someone to add your name on his credit card, you should confirm your status before accepting such offer.  You should also check your credit report regularly to find out what is your legal status on such card.