Authorized User vs Joint Credit Card: What's the Difference?

There are several ways to share a credit card account in Canada: adding an authorized user or additional cardholder, applying together as co-borrowers on a joint account, or having a guarantor stand behind someone else’s card. They differ in who owns the account, who has to pay the balance and how each person’s credit is affected. This comparison is part of our credit card basics guides.

The roles at a glance

The Financial Consumer Agency of Canada (FCAC) describes four roles:

Source: FCAC, Joint credit cards.

Authorized users and additional cardholders

The primary cardholder adds another person, who gets a card on the same account. “Any purchases made by an additional cardholder or authorized user will appear on your monthly statement. If you’re the primary cardholder, you’re responsible for paying for these purchases.” The added person owes nothing on the account. Some issuers allow an authorized user under the age of majority, while a primary cardholder must be of age in their province or territory.

On credit history, FCAC’s guidance for an additional cardholder is that “any purchases you make using the card won’t help you build your credit history.” Whether an issuer reports anything about an authorized user to the bureaus, and what lenders make of it, is covered in being an authorized user. For someone who needs to build a file of their own, how to build credit from scratch covers the products that do report in their name.

Joint accounts (co-borrowers)

Some issuers let two people apply together. Both are co-borrowers, both can use the account and both are “equally responsible for the balance.” Because the account is in both names, its payment history reflects on both people: on-time payments help both, and a late payment or a high balance counts against both. With a federally regulated issuer, each co-borrower must receive the account’s required disclosure information. Joint credit cards are less common in Canada than primary-plus-additional-cardholder accounts; ask the issuer whether it offers them.

Guarantors

Someone who wouldn’t qualify on their own can sometimes get a card with a guarantor, often a parent or guardian of a minor. The guarantor can’t use the account but is responsible for the balance if the cardholder doesn’t pay.

After a separation

• Authorized user or additional cardholder: the primary cardholder can remove them at any time by contacting the issuer, after which the added card stops working. Charges made before removal remain the primary cardholder’s to pay.
• Joint account: both co-borrowers stay responsible for the balance, including charges made by the other, until it’s paid and the account is closed. Closing a shared card is one of the situations covered in does closing a credit card hurt your credit score, and how to cancel a credit card covers the steps.

After a death

An authorized user isn’t responsible for the primary cardholder’s balance when the primary cardholder dies; the estate is. A co-borrower on a joint account remains responsible for the balance. What happens to debt when you die covers how the estate deals with card debt.

Which arrangement suits which situation