Can Piggybacking hurt the primary credit card holder?
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I’d like to jump start my son’s credit and make him an authorized user on my credit card, but I’m not sure how it will affect my credit. Can piggybacking hurt the primary credit card holder?
Piggybacking is safe
Piggybacking is safe because YOU own the account, so as long as YOU make the payments on time – nothing can go wrong…
Not entirely true
If the authorized user actually uses the card, then the average spending on the account increases, which raises the utilization (even if you PIF every month).
Any utilization above 30% will hurt your credit score!
If you plan your son to actually use the credit card, make sure to ask for a CLI. This will increase the CL so even after you spend more the util will remain low.
It also increases your DTI
While DTI is not considered by FICO, it does affect you when you ask for new lines of credit. Unlike utilization, DTI is the ratio between your debt and annual income. Low DTI means lesser terms…
See this post about the required CL.
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