A Reddit user was shocked to find an outstanding credit card debt of $30,000 on his credit report despite never having spent over $5,000 over the past five years.
'My parents gave me a credit card with my name on it while I was in high school. I used it over the years for small things like ordering food and ubering to and from college. These weren't big purchases though, everything adds up to maybe $5k over the last 5 years.' the user wrote on the social media platform.
The person was reviewing finances on the credit karma platform as part of plans to move out, but the high levels of debt has triggered some serious concerns regarding his financial future. The Reddit user contacted the credit card company seeking information, but the representative denied emailing the transaction history because the credit card does not belong to the primary account.
'I'm very confused and frightened. I was beating myself up because I thought I was being irresponsible but it sounds like there's another card in my name. Especially so since the card I have is a different type from the one listed on credit karma (same company),' the user wrote.
The user sought advice on the situation to understand the full picture before these issues impact his future credit score. 'I'm not comfortable having so much debt in my name that I didn't rack up. I've never seen so many zeros on an account outside of movies and news articles,' the user had commented on Reddit.
What Really Happened Here?
Upon pressing bank representatives, the user learned they are an authorized user of the credit card and are not legally liable for the debt, even if linked to their Social Security number.
'That's a huge relief. This explains why I'm unable to get cards from other companies for myself and why I haven't heard back from realtors for apartments,' the user noted.
A credit card holder can add a person as an authorised user. Upon using the card, debt levels and transactions will show up on the credit report, but won't make the authorised user liable to repay the debt. Becoming an authorised user can offer a way to rebuild your credit score, especially if you are ineligible for cards or have no credit history.
However, higher debt balances due to credit card usage patterns of the primary account holder could impact the credit score of the authorised user. In this case, the Reddit user can simply ask the credit card company to be removed from the account as an authorised user, which should take effect on the credit report within 90 days.
Remember, a poor credit score can affect more than just your chances of securing loans or favorable interest rates — it can impact your job and rent applications. If you have a low credit score, your insurance premiums could be higher. Telecom providers might deny postpaid plans, and utility providers could require a security deposit before offering service.
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