Difference Between a Credit Card & a Supplementary Card

Banks and other financial institutions prefer to give credit cards to people who already have good credit. If you don't have any credit history to rely on, you can't qualify for most credit cards. A supplementary card is one way to solve the dilemma of needing credit to get credit. You get this type of card only when a friend or family member trusts you enough to add you as an authorized user on their existing credit card account.

Major credit card issuers don't let every credit card holder add authorized users. Each has its own criteria, but generally, the primary cardholder must be creditworthy. Their payment history on the main credit card must be good. The primary cardholder also enough available credit to share with an authorized user.

Some lenders charge the primary cardholder a fee to add users, while others do not. In addition, credit cards that charge an annual fee to renew the card sometimes require a separate annual fee for your supplementary card.

In every case, the spending limit for your supplementary card is never greater than the primary cardholder's maximum credit for their card. However, a cardholder can also set a spending limit for an authorized user that has a supplementary card on their account. Once you reach that limit, you can't make any transactions with your card until your balance is below that limit. The primary cardholder also has the right to cancel your card completely.

The process for adding authorized users depends on the credit card company or bank. In some cases, the primary cardholder can add you by phone or online. Some credit card companies require the cardholder to complete an application.

Unlike a normal credit card application, generally, credit card companies don't require proof of income or a credit check for the holder of a supplementary card. However, the primary cardholder will need to provide your name and personal information to the credit card company.

They will need your birth date, Social Security number and your address, if different from the cardholder's. The card issuer might ask you to provide some form of identification. In some cases, credit card companies have minimum age requirements for supplementary cardholders. If you haven't reached the minimum age, you aren't eligible to become an authorized user.

The credit card issuer adds your credit card sub card balance to the existing cardholder's account statement. Although you're responsible for making payments on your supplementary card, you usually won't send the payment directly to the card issuer. You need to give your payment to the cardholder, and they send it to the credit card company for you.

The cardholder can give you a copy of the part of their statement that has your transactions. This will help you keep track of your outstanding balance and the payments due. You'll see your payments applied to your balance separately on each statement that the cardholder gets.

Every credit card issuer that permits authorized users on a primary credit card account has its own credit bureau reporting policies. If you are trying to build credit, ask the primary cardholder to find out whether the credit card issuer reports your use of the supplementary card separately from theirs. It's also helpful to know if the issuer reports your usage to one or all three major credit report agencies.