Authorized User May Have Cause for Concern

Dear Mary: When my brother-in-law was a pastor, he was authorized to use the church credit card to purchase things for the church. 


He has not been at that church for over a year and the church has never paid the final bill of $7,000. 

Because he was named an “Authorized User” on the account, should he be concerned that this is impacting his credit report negatively? What should he do? Cindy S.

Dear Cindy: Your fears may be well-founded because while your brother-in-law as an “Authorized User” carries no financial obligation to repay the balance, every month the status of that account is being reported to his credit file. 

If the church is making the required payments on time and not charging over the limit on the account, what is being reported will be positive. No worries there. But if the church falls behind in making the required payments each month, late payments showing on his report could quickly become negative for him, sending his credit score plummeting.

No matter the status of the account, as an Authorized User he can simply call the creditor to request to be removed from the account. He should do that immediately. 

Dear Mary: In 2008 I had zero credit-card debt, now I have two credit cards with balances of $27,000 and $47,000. The issues that created the debt load have all been addressed and eliminated. 

Is there a way to negotiate with the credit card companies to reduce the payoff amount? When I’ve looked into this, most of the debt-settlement people suggest that if I miss a minimum of three payments, then the companies will negotiate. I would rather not go through that kind of pain. Gene G.

Dear Gene: I believe you are referring to third-party debt settlement companies that promise to get your debt reduced.

You are right. Most will advise you that they can negotiate to reduce what you owe to just pennies on the dollar, but first, you will need to stop making payments in order to send a signal to these creditor(s) that you may be getting ready to file for bankruptcy. And that’s where things can get dicey. 

Honestly, those are the worst scam artists and I would recommend that you run, not walk, from anyone making those claims and giving that kind of advice. Did they mention their fees? They’re enormous and horror stories abound for how these clowns run off with all the money you are not sending to your creditors each month, but paying to them instead for “safe keeping.” 

Even if the banks were to negotiate your balances directly with you (don’t count on it), you would have to come up with the negotiated amount in full. And don’t forget that the amount forgiven would be reported as 1099 income on which you would owe taxes. 

Look, you borrowed the money willingly and you spent it. The right thing would be for you to pay what you owe.

I am happy to know that you have addressed the underlying issues that landed you in so much debt. You’ve learned some tough lessons—ones you are not likely to have to repeat. That’s a good thing.

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5 replies
  1. DianaB
    DianaB says:

    For Cindy, my first thought is that if there is a concern about being an authorized user impacting a person’s credit, his first move should be to get copies of his credit reports from all the big credit bureaus and check to see if it is even showing up on his credit reports. That would be the first step in resolving this concern. Then, you go from there.

  2. Sue P
    Sue P says:

    Dear Mary,
    About 15 years ago my mother got into financial difficulties with Credit Cards. She was struggling to make the minimum payments and missing payments. We contacted the Credit Card companies and offered to pay them off if they would reduce the amount. All but one agreed to the deal. I don’t feel guilty about it because I feel that they were charging outrageous interest rates and fees and taking advantage of an elderly person.

    • Guest
      Guest says:

      Excellent! And just to be clear, the amount you negotiated had to be paid at once, correct? You couldn’t continue to make monthly payments.

  3. Mary M.
    Mary M. says:

    I have been an authorized signer on my mother’s credit card for years and her card has never showed up on my annual credit report.

    • DianaB
      DianaB says:

      I am inclined to agree with Mary M. above. An authorized user is not the same as a co-signer so I would not think there would be any legal or financial obligation tied to same. I would have my name removed if the credit card company allows you to remove yourself in any case. One is simply allowed to use the card, not be financially obligated. But, I could be wrong, and I would certainly contact the company. If the balance has never been paid off by the church or regular payments were not being made, they would be coming after this person for payment if he was obligated as an authorized user, so I do not believe there is an issue here.


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