Editorial Policy

Should I add my son as an authorized user to my card?

Eva Norlyk Smith Ph.D.

July 14, 2014

QDear Eva,

My son is 16, and we are thinking about putting him on one of our cards as an authorized user to build his credit, and so he has a card for emergencies. Does this sound like a good strategy? –Joseph

AHi Joseph,

There are many advantages to adding your (almost) adult child to your credit card as an authorized user. And, as you may suspect, there can be some serious disadvantages, too!

You are correct that adding your son to your credit card account will help him start building a credit history, and it will make it easier for him to qualify for his own credit card down the road.Ask Eva

At the same time, as many a well-meaning parent has discovered the hard way, giving your kid access to your credit card can lead to many unexpected consequences. Many kids are used to getting money from their parents, and for them, the difference between money in the form of cash or via a credit card may be somewhat blurry. As many parents quickly find out, that credit card can become a branch extension of the Bank of Mom and Dad.

Once that happens, you will easily find yourself entering a territory of admonishment and blame, with your son feeling you are controlling and interfering, while you are frustrated because he is spending money you haven't given him.

That is the worst case scenario, but it is fairly common for parents who want to help their teen during the transition to financial independence.

That's not to say that you shouldn't add your son to your credit card. But it's important to plan ahead to avoid the kind of “charge creep” that can happen as your son discovers the financial freedom that a credit card offers.

Your son will have to discover the upsides and downsides of credit card usage sooner or later. If you wait until he is on his own, you may not discover problems before it's too late. Adding him to your card now will give you a chance to give him some basic financial education.

Keep in mind the adage, “Good fences make good neighbors.” Have clear guidelines.  For example, make him responsible for paying off his charges at the end of the month, and he needs to pay off the charges in full. Have him actually pay the bill, so he links the money he spends on the credit card with the size of the bills he has to pay. It will also teach him the basics of great credit card management.

Will he always adhere to that rule? Probably not. So here's Rule No. 2: Ask him to consult with you before making charges that he won't be able to pay off at the end of the month. That will give you an opportunity to talk with him about financial priorities and the consequences of choices. You may agree to float him for a couple of months if he, for example, wants to buy a high-ticket item.

What you want to avoid is the kind of indiscriminating, reflexive spending that a credit card at times can stimulate in users not familiar with the unpleasant truth of credit card usage: It's always a lot harder to pay back credit card charges than it is to make them! That is a hard lesson we all have to learn, and it is much better learned  under the guidance of a caring parent, as you clearly are. Good luck!

Got a question for Eva? Send her an email.