Credit card piggybacking is a strategy where you add someone as an authorized user on your credit card to help them enhance their credit history and improve their credit score. This process is straightforward and can be beneficial for those looking to build or repair their credit.
When you add someone as an authorized user, it comes at no cost to you. The authorized user will see the credit line appear on their credit report, which can positively impact their score. Understanding how credit scores work is essential, especially since the FICO credit score is determined by five key factors:
By adding a new credit line with a long history of on-time payments, you can enhance both the Length of Credit History and Payment History, which together account for 50% of the overall score. Interestingly, the person you add does not need to physically possess the card; simply adding them as an authorized user is sufficient to confer the benefits.
Minimum Ages for Authorized Users
It’s important to note that some credit issuers have minimum age requirements for authorized users:
- American Express – 13
- Barclays – 13
- Discover – 15
- U.S. Bank – 13
Other banks, such as Bank of America, Capital One, Chase, Citi, Wells Fargo, and USAA, do not specify an age requirement. If you’re looking to assist someone, check your oldest credit card to see if there are any age restrictions.
Some banks may not report the credit card activity for authorized users unless they meet a certain age. For instance, American Express states in their FAQ on Additional Card Members:
Q. How does the Additional Card Member establish credit?
A. Credit information will be provided to the credit bureau for the Additional Card Member when they are 18 or older. The Additional Card Member builds only positive credit history based on the credit behavior of the Basic Card Member. If the Basic Card Member becomes delinquent at any point, we will discontinue reporting on the Additional Card Member’s Card in order to retain positive history on the Additional Card Member.
Are There Downsides to Credit Piggybacking?
If you choose not to provide the authorized user with their own card, there are no downsides. However, if you do give them a card, you assume responsibility for their spending. While they may be an authorized user, the credit card remains yours, meaning you are liable for any debt incurred. If they do not have access to the card or its number, there is no risk involved.
Do Not Pay for Credit Piggybacking
Beware of credit repair companies that claim this strategy is foolproof. While it can be effective, there is no guarantee of success. In fact, many companies have settled with the FTC for misleading consumers regarding this method.
While adding a credit line may help, if your credit history is long and predominantly negative, the impact of adding one card may be minimal. The average credit line factor is just that—an average—so adding a single card to a portfolio of five negative accounts may not yield significant improvements.
Adding an Authorized User
The process of adding an authorized user is quite simple. Just log into your credit card issuer’s website, typically found under Accounts or Account Services. For example, here’s how it looks for Chase:
To add an authorized user, you’ll need some basic personal information. Notably, for Chase, you don’t even need the authorized user’s Social Security Number, yet they will still report the activity to the credit bureaus.
