The basics are very clear to me: you do not want to mix your spouse/partner's credit and yours for obvious reasons: if the relationship goes sour it may be costly, you share credit which may be risky if one is irresponsible, you are losing on opportunities such as bonuses you could duplicate by applying twice.
Last week, after converting a Citi card to a World Master Card for the perk of having rental insurance in Israel and Ireland (to which we travel regularly) I realized since we only use it for that purpose once a year I could have just have been added as an AU to my partner's card.
So here is my question: - Are there situations in which adding one as an AU is better than applying separately to a card? - Are there situations in which adding one as an AU is worse than applying separately to a card?
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The main situations where I could see an advantage for adding an authorized user (e.g. your spouse) to your credit card as opposed to your spouse applying for the same card are:
* Your spouse's credit scores preclude her/him from being able to get the card on their own. * You wish to not incur a hard credit inquiry for your spouse so that your spouse can pursue other credit opportunities.
OTOH, I've been an AU on my spouse's rewards credit card and my spouse has been an AU on my rewards credit card in order to maximize those reward opportunities. When I say "maximize," I mean using the heck out of both cards -- for legitimate, affordable purchases of course. I'd never suggest otherwise.
Something to consider though is that being an AU might very well result in that credit card showing on your credit reports and affecting your FICO score, e.g. because of large balances being reported. Ironically, FICO '08 was initially supposed to eliminate card for which one is an AU from one's credit reports (which would also avoid "piggybacking" where a person has their poor credit scores boosted by being an AU to someone with stellar credit scores). The latest version of FICO '08 now includes cards for which one is an AU on one's credit reports, but also claims to largely eliminate the piggybacking effect.
Another situation in which I thought would be valuable is if one member of the family has a card with annual fee (for some reason) that give a perk and the AU could share the perk. For example the Citi AMEX where the AU can get their own Priority Pass without paying the annual fee. Any others?
Another advantage is that you can combine your spending to hit tier-based rewards programs easier, such as with AMEX Blue. This mainly applies to people who don't plan on buying $6500 worth of dollar coins the first month of each yearly cycle, but even if you do buy the coins it lets you buy only $6500 instead of the $13000 it would take for the both of you to hit the $6500 tier individually.
Value to add spouse/partner or other: some credit cards offer bonus points if you add an authorized user. For example, http://www.continental.com/web/en-US/content/products/chase/continental.aspx?SID=E8BFA4EFF141401283346881C31FDDF8&offer=WL25&mkid=6G5T gives you 20k OnePass Bonus Miles after first purchase, and 5k additional bonus miles after your first purchase when you sign up an authorized user! I just wonder whether you can add yourself, or your pet's full name, as an authorized user? Edit: $85 annual fee; too high?
Message edited by: bankdealsrule on 2009-08-31 22:28:57 CDT
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