You cannot open a credit card in someone else’s name either by pretending to be them or by using their social security number. This would be considered as identity theft.
However, there are cases where you can assist someone in either opening a credit card or in becoming an authorized user on their account. There are advantages and risks to either of these approaches.
If you have the Power of Attorney for someone, you may even have the authority to open a credit card account in that person’s name.
However, you will not be able to sign charge slips or make purchases on their behalf.
Is it illegal to open a credit card in someone else’s name?
Yes, it is against the law to open a credit card in someone else’s name unbeknownst to them, regardless of whether they are family.
Opening a credit card requires that you hold a valid social security number, and possess good credit history.
You cannot just assume someone else’s identity or their credit history for any matter or reason.
Even if you plan on paying the resulting credit card bills yourself, this would still be considered as identity theft.
What happens if you open a credit card in someone else’s name?
Like many crimes, nothing may happen unless you are caught. There are rare cases where the victim (whose information was unlawfully used) does not actually report the crime.
Not only that, but they may also assume responsibility for the charges as well as pay the associated bills on time without actually realising the fraudulent activity.
Perhaps they are just so pre-occupied with other things that it never dawns on them.
On the other hand, a more observant victim may uncover the suspicious activity and realise they never opened a new credit card account!
He or she will most certainly notify the associate credit card company, the credit bureau, file a police report, and forfeit paying any of the resulting bills. And the perpetrator will most likely face prosecution.
Can I get a credit card under my parents’ name?
One option for parents is to include their child (or adult offspring) as an authorized user on one of their own credit card accounts.
There is no state or federal law regarding the required age for an authorized user.
Age requirements for children may vary between credit cards. However, there are some that don’t even impose any such restrictions.
Becoming an authorized user on an established credit card account, owned by an adult, will mean that the person (even if they are still a child) can make purchases with a card of their own.
The responsibility of paying the bills however, remains with the account holder. A parent, for example, is legally responsible for paying all bills including those accumulated by their child.
What are the benefits of adding your child to your credit card?
In lieu of giving their children cash, parents may find that including them under their credit card can provide an early positive experience, especially when credit purchases are made under their supervision.
It’s a good way to track the child’s spending and teach them that credit doesn’t have to be a bad thing when used correctly.
Depending on the type of credit card, parents may also earn reward points or miles on their account, which would have otherwise been non-existent had they simply given their children cash.
It can also be a good way for a child to start building credit, as their identity is linked to the account.
The only risk to the child is when the parent themselves do not have good credit, unable to pay their loan, or fail to pay the bills, including the child’s purchases, in a timely manner.
This can damage a child’s credit score and consequently make it difficult for them to secure credit cards, loans, and even mortgages of their own in the future.
Instead of building up their credit score, this experience can result in them having a low credit score, even before the age of 18.
How to open a credit card for someone with Power of Attorney
One legal and acceptable way in which you can open a credit card in someone else’s name is when:
- that person has granted you power of attorney (POA), and
- the specific terms of the POA allow for this.
Now whilst as the Agent, you might be able to open an account in the Principal’s name, you won’t be able to use the credit card yourself and sign on their behalf for any transactions.
If you’d like to be able to make purchasers on behalf of the Principal, you can request to become an authorized user on the account.
In this case, you can use your own credit card tied to the Principal’s account as well as sign your own name for any purchases you make with it.