Rewards credit cards offer bonuses for adding authorized users onto their accounts

There are new ways for cardholders to earn reward points and they can do so by adding authorized users onto their accounts. This is the latest offering by card issuers on rewards credit cards.

A few well-known hotel and airline cards especially those with affiliations with Starwood, United Airlines, Continental Airlines, and Delta Airlines have all started giving away bonus or mileage points when their clients take add-on cards for friends or family members.

The bonus points are typically in the range of 1,000 to 5,000. Although they are not very lucrative, it is still an easy way to add on to rewards cards where you can avail that free flight ticket. For instance, Chase’s United Mileage Plus Visa Signature card gives a 5,000-mile bonus if cardholders charge their cards with the initial $250 and also add on another authorized user.

When these offers are made by the card companies they can ensure that customers will have another incentive to spend more and some of the high spenders will certainly go that extra mile. This also goes to show how card companies keep enticing customers with points, balance transfers, or shopping with certain brands etc.

Generally, these bonuses are being offered on the co-branded cards that card companies operate in partnership with airlines or hotel chains.

However, experts warn that cardholders must exercise caution while offering these privileges to individuals who are not in the habit of paying back the money.

Added to this, requesting authorized users may even lower the credit scores of the cardholder by a few points. This is because of the ‘hard inquiry’ that is conducted where card companies check the credit reports when a cardholder makes a request for additional cards.

Due to this, there are many who feel that bonuses for adding authorized users are not really worth all the effort.

Rick Ingersoll states that if there is a hard inquiry and you get only 5,000 miles for adding authorized users, then he feels that it is not worth all the effort. He feels that these inquiries must be saved for better rewards deals. Since sign-up bonuses are found to be more lucrative of late, Ingersoll feels that people should instead opt for that, to maximize their points or gain air miles. But by the end of the day, it is the primary cardholder who will be accountable for the card and hence, it is better to be cautious.