I had the opportunity to work with Sam on her first credit card application recently. Sam is a 23 year old college grad and never had any credit in her own name. BUT her parents put her on their American Express card as an authorized user and has been on that card for numerous years.
Here is the good: It gave Sam a credit score of 740 just being the authorized user.
And the bad: At the moment she applied for her first card, a Chase Sapphire Preferred card, there was a $12,000 balance, she knew nothing about on that American Express that belonged to her parents.
When I met with Sam it had been several days since her application and she was waiting on a response. I suggested we make a call to the reconsideration line to check the status of her first application. After she provided the normal security info was provided, and I was listening on the call via speakerphone, Sam was told she was denied because of the high balance on the Amex card she was an authorized user on. The look on her face showed extreme disappointment but I reassured her we would be OK.
We reiterated to the credit analyst that Sam was only an authorized user in regards to the $12K balance and not legally responsible for the debt, that she was a college educated individual working in her field, lived at home with no expense and the analyst had her income on the application. After a short hold the analyst came back to inform Sam she was recommending her for a $5,000 credit approval and to expect a document in the mail which we assume was to verify income and address.
We worked our way past the balance on the parent’s card but I want you to be aware that being an authorized user is not always the best way to go. I think in this instance for Sam, it got her a score which let her start in the game and presented a hurdle we had to overcome. Now that Sam is in the game, we’ll try to keep her away from authorized users in the future.
UPDATE: Yep, Sam got her approval
Possible exception: Howie made a great suggestion last week for those of you struggling to find Vanilla Reload cards. Do you have a very, very,very good friend, you trust to become an authorized user in a location where Vanilla Reloads are available?
Congratulations to Rene at Delta Points on his One Year Blog Anniversary
“Rene has been a FTG supporter for years and I’m glad to have him as a blogger brethren member this last year. In addition to great content on a unique topic, his attitude is always positive and his uplifting enthusiasm for the travel space has been welcomed by all.
Way to go Rene and keep those posts coming.”
Chase Sapphire Preferred® Card
- Annual Fee: $95 fee waived for the first year
- Foreign Fees: No
- Card Type: Bank
The Sapphire Preferred offers 2x points on dining and travel, and no foreign transaction fees, making this the go-to card for travelers.
This card accumulates Ultimate Rewards points, which are very valuable for transfer to United and Hyatt. Overall, this card is a great choice for maximizing earnings on dining, travel, and every day spend.
- Earn 40,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $500 in travel when you redeem through Chase Ultimate RewardsSM
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening.
- 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases
- No foreign transaction fees, plus Chip and Signature enabled for international travel.
- 1:1 point transfer to leading frequent travel programs at full value — that means 1,000 Ultimate Rewards points equal 1,000 partner miles/points.
- 24/7 direct access to dedicated customer service specialists
- Introductory Annual Fee of $0 the first year, then $95