Financial Counseling Certification Program (FiCEP) Practice Exam

True or False: Being an authorized user on a credit card means you are responsible for debt on that account.

1. True

2. False

3. Only if you use the card

4. Depends on the cardholder

The correct answer is: False

Being an authorized user on a credit card means that you have the permission to use the card for purchases, but you are not legally responsible for the debt that accumulates on that account. The primary account holder retains responsibility for all charges made on the credit card, including those made by authorized users. This distinction is crucial as it allows individuals to benefit from the primary cardholder's credit history and payment record, potentially helping to build their own credit score without incurring the debt liability associated with the account. Authorized users can make purchases and have their activity reported to credit bureaus, which can positively affect their credit profile. However, any outstanding balance, late payments, or similar issues are the primary account holder's responsibility. Therefore, stating that being an authorized user means you are responsible for the debt on that account is false.