Adding authorized users to your credit card can make sense in several scenarios, whether you want to help your teen earn credit or you need to manage and control employee purchases for your small business. However, since you are solely responsible for all authorized user spending, setting limits on their purchases may be a smart move.
By setting different credit limits for multiple users on a personal card, you can prevent your children from making purchases over a certain limit or charging more than you agreed in advance.
On the other hand, with employee cards, setting limits can help prevent fraud or situations where employees take more than you are comfortable with. At the same time, you get the ability to track your employees’ purchases in one place and get rewarded for their spending.
How to manage authorized user spending
When you add an authorized user to your credit card account, it is important to note that they will receive their own credit card with their name on it. Your authorized user will also be able to make card payments if they wish, but you will be legally responsible for all their charges.
Fortunately, credit cards that allow authorized users usually list all authorized user purchases separately on your credit card bill. This makes it much easier for major cardholders to see which user has made which payments, as well as how much they have spent.
Before you set up an authorized user on your personal or small business credit card, you should think about what you hope to achieve. You may have very different goals when adding an authorized user to your personal card than you would with a corporate credit card, and that’s understandable.
Here are some tips to help you successfully manage your authorized user spending in any case:
- Inform your authorized user’s spending limit in advance. Whether or not your credit card allows you to set spending limits for authorized users, you can still tell the limit to the person who receives their own card. This can help set clear spending boundaries, which can help prevent problems before they occur.
- Set up alerts in your account. Many credit cards allow you to set up alerts when you make a purchase or when you make purchases over a certain amount. Setting up these alerts can help you know at a glance when authorized users are spending money.
- Check your credit card statement regularly. While learning about purchases after the fact won’t help prevent overspending, you should still review your credit card statements every month. This can help you ensure that you are comfortable shopping with authorized users. You may also find patterns or instances where the cards weren’t used as planned.
Credit cards to manage authorized spending
It would be nice if all credit cards allowed different credit limits for individual authorized users. At the end of the day, you may not want limits on your spouse, but adding limits on the teen added to your account can save you all sorts of problems.
Unfortunately, not all credit card issuers support this feature. In fact, American Express is the only card issuer that allows cardholders to set spending limits on all of their consumer cards. Small business credit cards are another exception, as most card issuers allow their customers to set limits on employee cards.
Consumer credit cards
When it comes to consumer credit cards, American Express is your best bet today. The exception is Citi’s Costco Anywhere Visa®, which is the only Citi credit card that allows users to set spending limits for authorized users.
While there are American Express credit cards that allow you to set limits for authorized users are wide and varied, here are a few of our top picks:
American Express Blue Cash Preferred Card
The American Express Blue Cash Preferred® Card is a great credit card for families because it offers bonus rewards across several categories of everyday spending. Specifically, cardholders can receive 6% cashback on up to $6,000 spent in US supermarkets each year (then 1% cashback), 6% cashback on select US streaming services, 3% cashback on purchases and gas station fares in the US and 1% refund. for all other purchases. New cardholders can also receive a $300 welcome bonus by spending $3,000 on purchases within six months of opening an account. An annual fee of $95 applies, but this fee is waived for the first year.
American Express Gold Card
The American Express® Gold Card allows cardholders to earn 4x the American Express Membership Rewards points on meals worldwide, 4x the points for spending up to $25,000 in US supermarkets per year (then 1x more points), 3 times more points for flights booked by airlines or through AmexTravel.com. and 1X points for other purchases. New cardholders can also earn 60,000 Membership Rewards by spending $4,000 on purchases within six months of opening an account. This offer includes several perks, including up to $120 in Uber Cash each year and up to $120 in annual food credits. There is an annual fee of $250.
Blue Cash Everyday Card from American Express
The American Express Blue Cash Everyday® Card offers 3% back on up to $6,000 spent in US supermarkets each year (then 1% back), 2% back at gas stations and select US department stores, and 1% back on other purchases . New cardholders can also receive a $200 welcome bonus by spending $2,000 on purchases within the first six months of opening an account. This card does not charge an annual fee.
Business Credit Cards
When it comes to business credit cards, which allow major cardholders to set employee spending limits, just about any card is on the table. In fact, most major card issuers offer this feature on their business cards, including the following:
- american express
- Bank of America
- Capital One
- City
- chase
- discover
Our top picks for business credit cards that allow spending limits on employee cards include:
American Express Blue Business bank card
The American Express Blue Business Cash™ card offers a 2% cash back on purchases up to $50,000 each year, after which cardholders get 1% back for every dollar spent. There is no annual fee and comes with an initial 0% APR on purchases for the first 12 months (thereafter a variable APR from 13.49% to 21.49% applies). New customers can also receive a $250 credit after making $3,000 worth of purchases within three months of opening an account.
Ink Business Unlimited Credit Card
The Ink Business Unlimited® Credit Card offers a flat cash back of 1.5% per dollar spent, and new cardholders can earn a $750 cash bonus when they spend $7,500 on purchases within three months of opening an account. An initial rate of 0% on purchases also applies for the first 12 months, after which cardholders pay a variable rate of 13.24% to 19.24% per annum. This business credit card does not charge an annual fee.
Capital One Spark Cash Select
Capital One Spark Cash Select also offers a flat cashback of 1.5% for every dollar spent, and there is no annual fee. New customers can also earn $500 in bonus money by spending $4,500 on purchases within three months of opening an account. The good news about this flat-rate cashback card is that you don’t need to sign up for any categories to start getting money back, and there are no limits on how much money you can earn.
bottom line
Setting unique spending limits for authorized users can help prevent serious problems and, in some cases, fraud. This is true when you add a dependent to your card to help them increase their credit, but it’s also true when you customize employee cards to make their purchases more convenient. However, you should carefully compare credit cards that offer this option and disagree until you find the right one.
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The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.
