Family Credit Card Strategy: Add Authorized User Or Apply Outright?

We all have different credit card strategies, which are impacted by what kind of rewards we’re looking for, what categories we spend most in, etc. One question I often get from readers who share finances with others (family members, spouses, etc.) is whether it makes sense to add family members as authorized users to a card you already have, or to have them apply for a card outright, so they’re also a primary cardmember.

I wanted to give examples of some cards where it makes sense to add people as an authorized user, and also examples of cards where it makes sense to have as many primary cardmembers as possible. I’ll be taking the welcome bonuses out of the equation at first. However, this should be a major consideration, so I’ll cover that a bit later on.

Cards where you’re better off adding authorized users

There are some cards where it makes more sense to add authorized users, rather than having two or more people hold onto the cards as primary cardmembers. These are generally cards that offer strong perks for authorized users at a reasonable (or no) annual fee, as well as cards with annual fees that offer a great return on spending for authorized users, so that you can maximize your points.

Here are six cards where it can make a lot of sense to add authorized users, in my opinion:

• The Platinum Card® from American Express (review) has a $695 annual fee (Rates & Fees), though offers lots of great benefits that help offset that. While only the primary cardmember gets most of the credits, authorized users get lots of perks as well, including access to the full airport lounge program. Each authorized user will cost $195 (Rates & Fees).
• The Chase Sapphire Reserve® (review) has a $550 annual fee, and offers a $300 annual travel credit, a Priority Pass membership, and 3x points on dining and travel. You can add authorized users for $75 each, and they get Priority Pass memberships and earn 3x points on dining and travel as well.
• The Citi® / AAdvantage® Executive World Elite Mastercard® (review) has a $595 annual fee and offers an Admirals Club membership. What makes this card unique is that you can add authorized users at $175 (total) for the first 3, and then you’ll pay $175 for each additional authorized user. Each of them gets Admirals Club access as well. So generally it makes more sense to add authorized users rather than have multiple people hold onto the card.
• The Capital One Venture X Rewards Credit Card (review) (Rates & Fees) has a $395 annual fee, though that’s easily offset by a $300 annual travel credit and 10,000 anniversary bonus miles. What makes this card most exciting is the value proposition for authorized users — you can add four at no cost, and they each receive a Priority Pass membership, Capital One Lounge access, and more.
• The American Express® Gold Card (review) has a $250 annual fee (Rates & Fees), though offers perks that help offset that. The main reason to get this card is because of its excellent rewards structure, as you can earn 4x points at restaurants, 4x points at U.S. supermarkets (up to $25,000 per calendar year), and 3x points for flights booked directly with airlines or at amextravel.com. You can add up to five authorized users at no additional cost, making this a great card for maximizing your Amex Membership Rewards points.
• The Chase Sapphire Preferred® Card (review) has a $95 annual fee, and lets you add authorized users at no extra cost. The card offers 3x points on dining, online grocery purchases, and select streaming services, and 2x points on travel. Adding authorized users is a great way to maximize your rewards at a low cost.

Cards where you’re better off applying outright

There are also some cards where it makes sense to apply outright as a primary cardmember, rather than adding a family member as an authorized user. These are generally cards where the ongoing perks for primary cardmembers more than justify the annual fee, not even factoring in any return on spending. This also includes no annual fee cards that offer a generous return on spending, but with a cap.

Here are five cards where it can make a lot of sense to apply outright as a primary cardmember, even if a family member already has the card:

• The IHG One Rewards Premier Credit Card (review) has a $99 annual fee, and offers an anniversary free night certificate on your account anniversary every year, valid at a property costing up to 40,000 points (though you can use points to top off for a more expensive redemption). That alone should more than justify the annual fee. However, the card has lots of other great perks, from IHG One Rewards Platinum status, to a fourth night free on award redemptions, and more. The more people in your family that have this card, the better.
• The World of Hyatt Credit Card (review) has a $95 annual fee and offers an annual free night award valid at any Category 1-4 Hyatt property, which includes some great hotels that retail for way more than $95 per night. The more primary cardmembers you have, the more free nights you can get every year.
• The Alaska Airlines Visa® Business card (review) has an annual fee as low as $95 ($70 for the company and $25 per card) and offers an Alaska companion fare on your account anniversary every year, starting at just $122 ($99 base fare plus taxes & fees starting at $23). If you fly Alaska with any frequency, then there’s value in having as many of these as possible, especially given how few restrictions are associated with the fare.
• The Chase Freedom Flex^SM (review) has no annual fee and offers 5x points in rotating quarterly categories, which is a great way to boost your Ultimate Rewards points balance. The catch is that you only earn 5x points on the first $1,500 spent each quarter, so if you’re someone who would spend more than that in those categories, it could make sense to have multiple people pick up the card to maximize value.
• The Blue Business® Plus Credit Card from American Express (review) has no annual fee (Rates & Fees) and offers 2x Membership Rewards points on the first $50,000 spent across all categories each calendar year (after that 1x). This is a bit different than the above family scenario since this is a business card, but if you’re in a position where you have more than $50,000 per year of spending, it could make sense for multiple people to pick up this card to maximize the Amex Membership Rewards points you can earn.

How do welcome offers factor into all of this?

Credit card issuers offer huge welcome bonuses on many cards, which can in some cases be worth $1,000+. You only get these bonuses when you apply for a card outright, and not when you’re added as an authorized user.

Above I’ve tried to look at the big picture, and whether you’re better off applying for a card outright or being added as an authorized user in the long run. In the short term it’s a totally different story, since the math almost always works out better when applying for a card directly, given the bonus.

Everyone will take a different approach in this regard, and to how they want to factor the welcome bonus into their decision making process. I will say that these kinds of bonuses often cause my household to have multiple people as primary cardmembers, rather than authorized users.

Bottom line

There’s no perfect credit card strategy, though there is an important distinction to be made between adding someone as an authorized user and having them apply for a card outright in order to be a primary cardmember.

Generally speaking, I’d say it’s worth adding someone as an authorized user on a card with strong authorized user perks at a reasonable or no cost, as well as on cards with annual fees that offer a good return on spending for authorized users. Meanwhile I think it’s worth applying for a card outright when the benefits of holding onto a card outweigh the annual fee, even not factoring in spending.

I’m curious to hear from OMAAT readers — what’s your family’s strategy with deciding whether to add an authorized user or apply for a card outright?

The following links will direct you to the rates and fees for mentioned American Express Cards. These include: American Express® Gold Card (Rates & Fees), The Blue Business® Plus Credit Card from American Express (Rates & Fees), and The Platinum Card® from American Express (Rates & Fees).