Primary Account Holder: Definition, Examples, vs. Secondary (2024)

What Is a Primary Account Holder?

The term primary account holder refers to the main user of an account such as a credit card, bank account, or loan. This is the person who is legally responsible for the debt, along with the maintenance of the account. This individual can also make changes on the account, including issuing access and/or cards to other authorized users.

Key Takeaways

  • A primary account holder refers to the main user of an account, such as a bank or credit card account.
  • Primary account holders are legally responsible for the account.
  • Primary account holders can name others as "authorized users" on the account, but they remain responsible for it.
  • Joint account holders share responsibility for that account and both are considered primary account holders.

How Being a Primary Account Holder Works

The person who applied to open a bank account or sign up for a credit card is referred to as the primary account holder. The financial institution uses their financial profile in order to approve (or not approve) the account.

With most financial accounts, the primary account holder has the option to give authorized users access to the account. Those are known as secondary account holders and, in the case of credit cards, also called additional cardholders. The primary account holder is still liable for all charges on the account, including transactions made by both the primary account holder and any authorized users.

Examples of Primary Account Holders

Two of the most common types of financial accounts that have primary account holders are checking accounts and credit cards. Here is how they work for the primary account holder:

Checking Accounts

Opening a checking account is usually a relatively simple process. The financial institution will, however, request certain personal information from the primary account holder, including their full name, address, and Social Security number.

A primary account holder who's approved for a checking account will typically receive a debit card and a batch of personal checks to give them access to the money in the account. Primary account holders have the option of adding an authorized user to the account and having the bank provide them with their own debit card.

As mentioned, the primary account holder is responsible for the account and paying any fees that it may incur, such as overdraft fees. By law, however, the account holder's liability is limited. For example, if their debit card is lost or stolen, their liability is limited to $50 if they report the loss or theft within two business days of discovering it. Their liability rises to $500 for the next 60 calendar days, and if they fail to report it during that period they may be liable for all of the money in their account plus any linked accounts.

Credit Cards

The primary account holder of a credit card is typically the person whose name is on it. When they apply for a credit card, the issuing bank will generally check their credit reports and credit score to make sure they are a good risk. That information can also affect the interest rate the card holder will have to pay if they're approved. The stronger their credit, the lower the interest rate and the larger the credit limit they may be approved for.

The primary account holder may request that the credit card company issue additional cards to authorized users, such as family members. The lender ordinarily won't check on the authorized users' credit histories, but it may report their activity with the card to the credit bureaus. This can be a good thing for authorized users who are trying to build a credit history in order to qualify for a card on their own.

However, the primary account holder remains responsible for all of the debt on the card. For that reason, primary card holders should be careful in who they allow to become authorized users on their card. Another option for someone with little or no credit history is to get someone else to cosign on the account, although most credit card issuers no longer allow this.

As with checking accounts, primary account holders' liability is limited by law. If, for example, their credit card is lost or stolen, their maximum liability is $50. If their account number is stolen, but not the physical card, their liability is $0.

Primary Account Holder vs. Secondary Account Holder

Authorized users are also known as secondary account holders. As such, they may be limited in their access to the account. This is especially common with business accounts, where a secondary holder may be authorized to make deposits into the account but not to withdraw money from it.

In most cases, the secondary account holder has no legal responsibility for the account. This means the institution cannot go after them in the event of non-payment or other problems, even if they are the ones responsible.

Primary Account Holder vs. Joint Account Holder

Many financial institutions offer joint accounts to their consumers. These accounts allow two individuals to be considered primary account holders. Joint accounts are common for married couples or family members, such as a parent and a child.

Either individual can also add authorized users to the account. Both joint account holders share the responsibility for all charges made by each other and by any authorized users.

What Is a Cosigner?

A cosigner is someone who agrees to be responsible should another person default on a loan or other debt. This is rare with credit cards today but still common with other types of borrowing and contracts like apartment leases. Unlike a primary account holder who allows someone to become an authorized user on their account, a cosigner typically doesn't use the account themselves, even though they are still liable for it. Any missed payments on the account can also have a negative impact on the cosigner's credit.

Do Mortgages Have Primary Account Holders?

A person who takes out a mortgage is often referred to simply as the borrower or, more formally, as the mortgagor. In the case of a joint mortgage, more than one person, such as a married couple or a parent and their child, will be legally responsible for the loan.

Will Having an Authorized User on a Checking Account Affect Your Credit?

No, unlike credit cards, bank account transactions aren't included on credit reports, so they don't affect your credit one way or another.

The Bottom Line

Being a primary account holder means that the account and any liabilities it incurs are yours and yours alone. You can add authorized users to the account if you wish, but the liability still rests with you.

Primary Account Holder: Definition, Examples, vs. Secondary (2024)


Primary Account Holder: Definition, Examples, vs. Secondary? ›

The Primary Account Holder is responsible for maintaining the account balance, ensuring bill payments, and setting up account alerts. The Secondary Account Holder can assist the Primary Account Holder in account management and monitoring.

What is the difference between primary and secondary account holder? ›

With most financial accounts, the primary account holder has the option to give authorized users access to the account. Those are known as secondary account holders and, in the case of credit cards, also called additional cardholders.

What is the difference between primary cardholder and secondary card holder? ›

The primary credit cardholder is responsible for the repayment of the credit amount. If the secondary cardholder fails on credit card bills, it will impact the primary cardholder's credit score. The primary cardholder is responsible for all credit card payments and is the authorised person.

What is primary account and secondary account? ›

The primary bank account is used for both depositing and withdrawing funds to and from the trading account. A secondary bank account is an additional bank account that can be added to a Zerodha account. The bank account mapped as a secondary bank account can only be used to deposit funds to the trading account.

What is an example of a secondary account? ›

Secondary Accounts

A Secondary Account is an alternative login. A Secondary Account could be, for example, a login for testing purposes, or an account with privileges (administrator account).

What is a secondary account holder? ›

Secondary Account Holder means a person who is a Membership Card Holder but who is not a Primary Account Holder in respect of that Membership. Sample 1Sample 2.

How do I know if my account is primary or secondary? ›

The easiest way to tell is to check your statement in online banking under Statements or on the printed copy of your statement. The name listed first is the primary account owner.

Can a secondary card holder become a primary card holder? ›

Ultimately, the actions an authorized user can and cannot take will depend on the card issuer's policies as well as permissions granted by the primary account holder. In other words, authorized users can't become the primary card holder.

Can a secondary account holder get a debit card? ›

The primary difference is that both people who own the account have full control over it. Each account owner can get a debit card, write checks and make purchases. Both account holders can also add funds or withdraw them from the account.

Can two people be primary card holders? ›

A joint credit card works just like a traditional credit card, except the account is shared by two people, with both individuals considered a primary cardholder. Each cardholder gets their own card that's linked to the account, and both are responsible for paying off the balance.

Can a primary account holder remove a secondary account holder? ›

Once a person has agreed to become a joint owner or signer on a checking, savings, or credit card, they can't be removed from the account.

How do I know if I'm an authorized user or joint account holder? ›

The most straightforward way to find out if you're an authorized user on a credit card is to call the issuer of the credit card in question and ask them directly. You can find the number on the back of your credit card.

Can a primary account holder close a joint account? ›

Can one party with a joint bank account close the account? Generally, no. Banks require that both account holders consent to closing the account. It may be possible in some cases for one account holder to remove themselves from the account, though, without the explicit consent of both parties.

What is the account holder name example? ›

Or it can refer to the account holder's name, for example if your account was opened in your name and your name was John Smith, your account name would be John Smith.

Can a primary account holder remove a secondary? ›

While no account holder can remove another account holder from a joint account without that person's consent, few banks will stop you from withdrawing or transferring the entire balance on your own. The most common joint account holders include parents and their children, spouses, and other close family members.

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