Daily Money - I'm the best big sister in the world

For him, being an authorized user could go south if I start financially flaking. If I randomly begin missing payments or carrying a huge balance, it could end up hurting his score. 

Having him as an authorized user could turn sour for me, too, if he goes wild and buys a bunch of PlayStations, beer or other boy things on my card. It’s not a joint account; we don’t share the burden. I’m the primary account holder, so the debt is mine even if the transaction isn’t.

“He’s not left holding the bill,” Bossler says. “He’s not responsible for paying it back.” 

The No. 1 factor in a credit score is on-time payments, but another potentially hairy area is the utilization rate. Cardholders are generally advised to keep their credit utilization ratio, which measures credit used in relation to credit available, under 30%. 

American Consumer Credit Counseling’s Madison Block pointed out that, based solely on the numbers, it’s easier for two people to spend more than one. She gave an example: Say my credit limit is $1,000, so I want to put no more than $300 on my card. I’ve been comfortable with that budget all this time, but then I add my brother. If I continue spending at my normal level and then he ALSO spends $300, our utilization rate is going to spike. And that means our credit score is likely going to fall.

“You have to agree ahead of time with that authorized user, that ‘Hey, each of us can only spend $150 a month,’” Block says.

That sort of agreement plays into another consideration around authorized users. I should only add people I wholly trust to my account.

“We’re blending family and money,” she says. “If things don’t go well, it can be a strain on the relationship.”

(but please don't tell me you scrolled past all of my hard work)

Adding my brother as an authorized user on my card can give him an advantage, but we should be careful. I’ll need to trust my brother to not run up debt, and he’ll need to trust me to make payments on time. We’ll both need to keep an eye on our utilization rate. I’m ultimately responsible for what happens, though there are ways to keep tabs on him. For example, I can pull my credit report (right now I can get one a week for free) and set up text alerts for any spending that happens on my account.

There is a failsafe, too: If it doesn’t work out, I can always remove him as an authorized user.

“You remain in control,” Bossler says. “You can add them on but also take them off.”

via GIPHY

check out this crazy celebrity purchase

video screenshot

The ex-Duchess of Sussex, Meghan Markle, gave royal fans a glimpse inside her new $14 million home in California with Prince Harry recently. On a Zoom call, eagle-eyed viewers spotted a trio of birds’ nests photographs hanging on the walls. Printed on handmade paper and made in the Golden State, they retail for around $170 apiece. Paying roughly 600 bucks for pictures of nests… what would the queen say?

five things I'm loving online right now

send me cute pictures of your pets, please

CREDIT: BARBARA SHEA

Meet Ollie, who is in fact a dog but is dressed as a bumblebee. Being a pawthorized user on his sister’s card is helping him build credit.

I think I’m going to go request my can-loving ex-roommate on LinkedIn. What could possibly go wrong?

See you next week.

Julia

P.S. Coronavirus scams are terrifying, huh? After last issue, Scholar Kristine wrote in to say she got an email that said she was fired — but it was actually a phishing attempt (her job is safe, thankfully). Scholar Gary told me about how Washington state has been dealing with out-of-control unemployment fraud.

P.P.S. Do you have a roommate horror story? What’s your favorite canned food? If you were a duckling, what kind of flower would you wear as a hat? I’m dying to know your answers, so reach out to me at julia.glum@money.com or @SuperJulia.