Managing the finances of a family member can be challenging, whether it’s an elderly relative needing help with day-to-day expenses or a college-bound kid learning financial responsibility. Adding them as an authorized user to your credit card is a great way to help them manage necessary purchases while also giving you a boost on earning rewards.
However, this also hands over access to your credit line, which can feel risky if you need to maintain tight control over spending.
When Is Setting Up a Spending Limit a Good Idea?
There are a number of reasons why setting up a spending limit for an authorized user might be a good idea. For instance, many caregivers add their children as authorized users to give them a boost in building positive credit history. But depending on their age, you might want to give them more responsibility — which means actually using the credit card. This is especially true if your child is about to go off to college.
Another common instance involves caring for an elderly family member. Instead of offering a weekly or monthly allowance, you can give a little more independence through a credit card with a spending limit.
Unfortunately, your options are a tad limited when it comes setting spending limits on consumer credit cards. But you still have options if you want to give your authorized user some financial independence.
[READ: Best Credit Cards for Students]
Issuers That Let You Set Spending Limits for Authorized Users
Only a few issuers let you set spending limits for authorized users on consumer credit cards — and even then, it’s not on all cards or the control is partial. This means your best bet is most likely going to be American Express. Keeping that in mind, here are our top picks.
Top Picks for Cards with Spending Limits for Authorized Users
American Express
There’s an American Express card for every type of annual-fee budget, starting with the Blue Cash Everyday® Card from American Express
, which has no annual fee. See Rates & Fees It earns:
— 3% cash back at U.S. supermarkets
— 3% cash back on U.S. online retail purchases
— 3% cash back at U.S. gas stations, on eligible purchases for each category on up to $6,000 per year in purchases (then 1%)
— 1% cash back on all other purchases
This is especially a good option for children going off to college since the Everyday Card earns rewards on groceries, gas and online purchases.
[SEE: Best American Express Credit Cards]
If you don’t mind an annual fee, the Blue Cash Preferred® Card from American Express earns even more cash back on groceries. The card has a $0 intro annual fee for the first year, then $95.. See Rates & Fees But in return, you get:
— 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%)
— 6% cash back on select U.S. streaming subscriptions
— 3% cash back at eligible U.S. gas stations and on transit, including taxis, ride-hailing, parking, tolls, trains and buses
— 1% cash back on all other purchases
The Blue Cash Preferred® Card from American Express could be a good option for an elderly relative since it earns rewards on streaming subscriptions and transit. Ride-hailing services like Uber and Lyft can add up, but are necessary for a relative who is unable to drive themselves.
[Read: Best Grocery Credit Cards.]
Now, if you’re comfortable with a $325 annual fee, you could consider the American Express® Gold Card. See Rates & Fees You also earn points instead of cash back with this card, which is great for travel bugs. The Gold Card earns:
— Four Membership Rewards points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then one point for the rest of the year
— Four Membership Rewards points per dollar spent at U.S. supermarkets, on up to $25,000 in purchases per calendar year, then one point for the rest of the year
— Three Membership Rewards points per dollar spent on flights booked directly with airlines or on AmexTravel.com
— Two Membership Rewards points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com
— One Membership Rewards point per dollar spent on all other eligible purchases
So if you’re trying to earn points for a trip and have a college-aged kid who loves going out to eat, the Gold Card is a great option.
Citi
Citi only allows you to set a spending limit on the Costco Anywhere Visa® Card by Citi. This isn’t necessarily a bad thing, though, since it’s a great option for lovers of the wholesale club. It has no annual fee and earns:
— 5% cash back on gas at Costco
— 4% cash back on other eligible gas and electric vehicle charging purchases (the 5% and 4% earn is for the first $7,000 combined spend per year, and then 1% thereafter)
— 3% cash back on restaurants and eligible travel purchases and eligible travel, including Costco Travel
— 2% cash back on all other purchases from Costco and Costco.com
— 1% cash back on all other purchases
The Costco Anywhere Visa® Card by Citi is a good option only if the authorized user in question lives near a Costco and you already have a membership (since that technically counts as your annual fee).
[See: Best Citi Credit Cards]
Barclays
Consider these Barclays cards with a grain of salt since you can only set a spending limit on a per-transaction basis (i.e., blocking charges over a certain amount). But if you’re fine jumping through that particular hoop, you have a couple of options depending on the type of co-branded credit card you choose.
If you prefer to earn airline miles and fly primarily with JetBlue, consider the JetBlue Plus Card. It comes with an annual fee of $99 and earns:
— Six points per dollar on eligible JetBlue purchases
— Two points per dollar at restaurants and eligible grocery stores
— One point per dollar on all other purchases
If you prefer earning points and primarily stay at Wyndham Hotels and Resorts, consider the Wyndham Rewards® Earner? Card. It comes with no annual fee and earns:
— Five points per dollar at Hotels By Wyndham as well as on qualifying gas purchases
— Two points per dollar on eligible dining and grocery purchases (excluding Target and Walmart)
— One point per dollar on all other purchases (excluding Wyndham Timeshare resorts down payments)
Both of these cards are good options because of the rewards they earn on dining and grocery purchases. If you’ve ever seen a college-aged boy eat, you know you’ll earn the rewards you need for that trip in no time.
Bottom Line
When choosing a credit card you can share with an authorized user, pick one that benefits the both of you. The authorized user gains a little financial freedom and you earn extra rewards. It’s a win-win.
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Credit Cards That Let You Set Spending Limits for Authorized Users originally appeared on usnews.com
