Difference Between Joint Account and Authorized User

Today we will talk about The difference between a joint account and an authorized user

The revolution in banking has not made operations easy, but it has also provided much-needed ease of access to capital. 

Different types of bank accounts are available depending on the needs and wishes of the client. 

For example, if people are joint account holders, they can access one account. If others are authorized account users, they can access the account. 

While the distinction between a joint account and an authorized user can be blurry, there are differences when it comes to credit reporting and responsibilities.

difference-between-joint-account-and-authorized-user

What is a joint account?

This is a brokerage or joint account that is shared by two or more people, including business partners, husband, and wife, relatives, or people who trust and know each other well. 

These can be long-term accounts or temporary accounts, such as those opened for a specific purpose, after which they will be deactivated.

Joint account holders are responsible for any fees, charges, and payments that may arise during the operation of the account. 

Examples of accounts that can be held jointly include credit product accounts such as mortgages, lines of credit, credit cards, and savings and checking accounts.

When opening a joint account, both parties should be present to ensure full authorization.

The benefits of a joint account include:

  • They enable account holders to obtain account benefits that are difficult for single account holders, such as access to credit facilities
  • It makes it easier for couples to focus resources on mortgage, debt, rent, or bill payments

On the other hand, disadvantages include:

  • Unrestricted use of funds by each party may affect all other parties, especially if one party such as a spouse has difficulty controlling their spending habits
  • All parties are responsible for costs and expenses
  • The government may withhold funds to meet outstanding orders, such as child support or bank taxes

Who is an authorized user?

This is someone who has legal access to a credit card account but is not legally responsible for paying the credit card bill. 

This person also does not have permission to make any changes to the account or access the account credit report. 

Authorized users basically have access to account information including charges and balances. They can also initiate bill disputes and make payments. 

However, users cannot change their PIN or address, add another authorized user, request changes to interest rates and credit limits, or close accounts.

Although late payment affects the authorized user's credit history, he is not obligated to pay any credit card debt or account charges. 

An Authorized User can also add to an established account at any time, regardless of their credit history.


Similarities Between Joint Accounts and Authorized Users

  • Both users have personal credit cards
  • Both can change accounts

The difference between a joint account and an authorized user

  • Definition
A joint account is a brokerage or joint account shared by two or more people, such as business partners, husband, and wife, relatives, or people who trust and are familiar with each other. 

An authorized user, on the other hand, is someone who has legal access to a credit card account but is not legally responsible for paying the credit card bill.

  • Account obligations
Joint account holders are responsible for any fees, charges, and payments that may arise during the operation of the account. 

Authorized users, on the other hand, have no account obligations other than initiating billing disputes and payments.

  • Authorize
While the joint account holder has full authority over the account, the Authorized User has limited account access and cannot change the PIN or address, add other Authorized Users, request interest rate and credit limit changes, or close the account.

Summary of Joint Accounts and Authorized Users

A joint account is a brokerage or joint account shared by two or more people, such as business partners, husband, and wife, relatives, or people who trust and are familiar with each other. 

Joint account holders have full authority over the account and are responsible for any fees, charges, and payments that may arise in the operation of the account. 

An authorized user, on the other hand, is someone who has legal access to a credit card account but is not legally responsible for paying the credit card bill. 

They have limited account access to the account and have no account obligations other than initiating bill disputes and payments. 

While both simplify financial transactions between people, the ideal type of account depends entirely on the purpose of the arrangement.
Next Post Previous Post
No Comment
Add Comment
comment url