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Of course, I’m thrilled that all his spending is now earning him rewards, and he is too. But that’s not really the smallest part of adding him as an authorized user on my Amex card.
Sure, one day he’ll accumulate enough points for a flight or two (and I’ll steer him away from redeeming those points for gift cards). But there are two other major reasons why making him an authorized user made sense.
First, being an authorized user on a credit card can help build your credit. This potential boost is because Amex reports the positive credit behavior of the primary cardholder, like on-time payments, to the credit bureaus as if it’s the authorized user’s own. For my brother, this means his addition to the Amex Gold card can start building him a history of responsible credit usage to help improve his credit score. It’s important to note that with American Express, authorized users only build positive credit history. If a primary cardholder becomes delinquent, Amex will stop reporting on the additional card member to preserve the positive history.
Second, making him an authorized user gives me the opportunity to teach him how to use credit cards responsibly. Like many others, when I was younger I was given the chance to open a credit card with zero oversight. This led to me maxing out the card and needing to pay it off while accruing interest.
Since I can see all his purchases, I can make sure he isn’t going wild—and he’s less likely to do so because I’m the card owner, not him. Plus, Amex allows me to set spending limits for additional cardholders. As the primary cardholder on the account, I retain sole responsibility for the card payments, but I’m willing to support him in this process.
Combined, these things mean that when he’s ready for a different card (preferably one with a large welcome offer), he’ll have both the credit history and the chops to take advantage of its benefits without overspending.