How an Additional Cardholder Works

You can typically add additional cardholders easily to a debit or Mastercard account. While this is a typical offer for these accounts, there are certainly pros and cons the account holder should have in mind before adding a user. Once you want to have another cardholder, the main cardholder must follow the steps set out by the financial organization. Most of these financial institutions have a specific process to follow.

Financial institutions normally require that an additional cardholder be eighteen years of age or older. Some of the processes for adding cardholders are done via the financial institution's web page. In some instances, a primary account holder might need to meet with a banking representative or speak with a representative over the phone. With most Mastercard accounts, you will request additional cards for authorized users like relations or, in the case of small business credit cards, employees

Once the process is complete, you will soon receive another Mastercard with the user's name thereon, and this user can then make changes to your account. However, the authorized user is not liable for repayment, which is usually the responsibility of the main account holder. If you are using a small business MasterCard, you will likely consider adding trusted employees as additional authorized cardholders. However, it is always a good policy to ask them to sign an agreement indicating what charges they are authorized to form on the corporate card.

Example of an Additional Cardholder

For example, let's say you make a spouse or relative an additional authorized cardholder. Once you have $20,000 in your account, you should tell them the quantity they are allowed to spend.

Let's say you make a mark at $10,000 as the amount they can use on your behalf and without your permission. As long as the additional cardholder doesn't cross the threshold mark, the bank will not inform you of the withdrawals.

Significance of an Additional Cardholder

An additional cardholder shares a credit card account, which is a helpful way to assist in a household's finances. One pro of credit cards is collecting the added rewards from card reward programs with extra spending. An extra cardholder will have access to the secure parts of the account, but the main cardholder can cancel the extra card at any time. While an additional cardholder can use the card normally, most main cardholders still have complete control over the account.

In some cases, an additional cardholder credit card is very useful. Parents might want to offer their children eighteen years and above access to some credit, even if it is only for emergencies. Once their child leaves for college, they will be able to do their shopping while allowing parents some peace of mind. Using the card doesn't require any permission from the main party.

Additional Cardholder vs. Joint Account

A joint account is a bank or account shared between two or more individuals. Joint accounts are generally used by relatives, couples, or business partners who have a grade of familiarity and trust with one another, and it normally allows for anyone named on the account to access the funds within it. Joint account holders have the same access to the money in the account and share equal responsibility for any fees or charges generated. Businesses conducted through a joint account can require the signature of all parties or just one.

An additional cardholder is essentially a co-owner for a credit or debit card account. Adding another cardholder is often compared to opening a joint account because multiple individuals have access to the account's funds when using a joint account, but in a joint account, both are responsible for fees and expenses. On the other hand, an additional cardholder is approved to make Mastercard purchases together with your account but isn't liable for the credit card balance.

An additional cardholder usually has the chance to enjoy all the advantages of a debit or Mastercard account with no liability, which remains the responsibility of the main cardholder. Without liability, an additional cardholder can also enjoy the advantages of credit or open-end credit without the responsibility. Therefore, using an additional cardholder doesn't require the signature of any party because it is only through a Mastercard. However, added users might increase the number of transactions and the balance on your Mastercard, not to mention they could also charge fees for adding a cardholder.