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The primary account holder on a bank account or credit card is the account's main user. They may have different authority and responsibilities compared to a secondary account holder or authorized user. Here's what you need to know about what it means to be a primary account holder.
How Being a Primary Account Holder Works
When you open a financial account, you're designated as the primary account holder and have full authority and responsibility for managing it. If you add another person to the account, they may or may not have the same access you do.
Here's how a primary account holder's responsibility can vary depending on the type of account you have.
Credit Card
When applying for a credit card, the primary account holder's credit history is reviewed to evaluate their eligibility for the card. If you're approved, you'll have full control over the account, as well as liability for repaying any debt that's incurred.
You can also add authorized users to your account who can use their own card to make purchases. However, only the primary cardholder is responsible for making payments.
Most major credit card issuers don't allow joint credit card accounts. However, those that do may offer both account holders the same level of access and payment responsibility.
Bank Account
The person who opens a bank account is considered the primary account holder. When opening a joint account with another person, you may be asked to designate a primary account holder. However, both owners have equal rights to the funds in the account. You can also add secondary account holders after you open the account.
Some banks may allow you to add an authorized user to your bank account, giving you the option to limit what they can do with the account.
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Primary Account Holder vs. Authorized User
Authorized users on a credit card may receive a card linked to the account that they can use to make purchases, and responsible use can benefit both your and your authorized users' credit scores.
However, only the primary account holder is responsible for making payments. At the same time, the primary account holder may be the only one who can:
- Redeem rewards
- Set spending limits for authorized users
- Add more authorized users
- Close the account
- Update personal information
With a bank account, an authorized user may be able to view the account balance and transactions and possibly even use a debit card linked to the account, but with some limitations. But they don't have equal rights to the funds in the account.
How Does Being a Primary Account Holder Impact Your Credit?
With a credit card, the primary account holder is responsible for making payments. On-time payments and a low credit utilization rate can help improve your credit score as a primary cardholder. If you rack up a large balance or miss a payment by 30 days or more, however, it could damage your credit score significantly.
When you close a credit card, positive account history will remain on your credit reports for 10 years, while negative items can stay on your reports for up to seven years.
As an authorized user on a credit card, your credit score can also be impacted by how the account is managed. However, if you remove yourself or the primary cardholder removes you from the account, the full account history will be removed from your credit reports, which can help or hurt your credit score, depending on how well the account was managed.
Learn more >> Will Being an Authorized User Help My Credit?
Do Mortgages Have Primary Account Holders?
Mortgage lenders typically use the term borrower instead of account holder. When applying for a mortgage loan, you're designated as the primary borrower, but you can add a co-borrower or cosigner to the application.
In both cases, the lender will consider both parties' credit profiles and financial information to determine eligibility and loan terms. However, a co-borrower has equal responsibility for making loan payments and shares ownership of the property, while a cosigner simply agrees to make payments if the primary borrower can't and doesn't share ownership.
The Bottom Line
As the primary account holder on a bank account, credit card or loan, you're primarily responsible for managing the account. Depending on the type of account, however, you may be able to share that responsibility with another person.
Primary account holders may also be able to add secondary account holders or authorized users to their accounts, but the other person's access, ownership and liability may vary based on their status and the primary account holder's discretion.
Regardless of your status on a loan or credit card, it's important to understand how it might impact your credit. Be sure to regularly monitor your FICO® Score☉ and Experian credit report for free to see how the account affects your credit score and get insights into how to improve your credit.