What Is a Cardholder Name? (And Other Basic Credit Card Components)
Most people have at least one credit card in their wallets, but how many have ever taken a closer look at this powerful piece of plastic?
If you’ve tried to familiarize yourself with your credit card’s features, you may have asked yourself, “What is a cardholder name?” or wondered about other basic credit card components.
While the design of credit cards may vary from issuer to issuer, all cards contain the same core information.
In this article, we’ll go over what a cardholder name is, as well as other essential credit card terms. We’ll also cover some important legal basics about credit cards, so be sure to stick around!
What Is a Cardholder Name?
A cardholder name is the name of that card’s owner, regardless of whether the cardholder is the account owner or an authorized user.
When your name is on a credit card, you have the authorization to spend from the account. That’s why sellers are often encouraged to ask for IDs before accepting card payments, although we haven’t actually been asked by a cashier for this in years.
The cardholder name is always printed on the front of the credit card. It includes the owner’s first name, middle initial (if provided), and last name.
The anatomy of a credit card contains important information that ensures the card is used correctly. However, it can be difficult to keep track of all of the terms, especially if this is your first credit card.
Essential Credit Card Terminology
Most of us have a rough idea of the information on our credit cards since it’s not difficult to make an educated guess.
That said, it’s a good idea to become acquainted with both the front and back features of your card in order to make the most of it.
Interested in other credit cards?
Check out our credit card hub!
Bank Branding/Credit Card Issuer
Every credit card has a name that identifies the card’s issuer. The financial institution or entity, usually a bank, to which you’ve applied for a credit card is known as the credit card issuer.
Some cards feature a logo for a specific program, such as rewards and benefits, as determined by the card issuer.
Credit Card Name
On most credit cards, the name of the card type appears after the card issuer. Here are some of the most common available credit card types:
● Cash rewards credit card
● Balance transfer credit card
● Student credit card
● Travel credit card
● Cashback credit card
● Business credit card
Payment Network Logo
You’re probably familiar with Visa and Mastercard credit cards. They’re credit card networks that provide a system of communication between a merchant and issuer to complete a transaction. Some credit card networks, such as Discover, are also issuers.
On the front of any credit card, there should be a logo indicating which credit card network your card issuer works with.
Magnetic Chip and Magnetic Stripe
Both the magnetic chip on the front and the magnetic stripe on the back of a credit card store payment information such as the cardholder’s name, card number, expiration date, and other details. They both work in tandem to make credit cards more secure and unforgeable.
Before the magnetic chip, credit cards used to rely solely on the magnetic stripe to carry the cardholder’s information, making it easier for dishonest merchants and hackers to steal that information.
Cardholder Responsibilities
As a cardholder, you have certain liabilities to ensure that you use the credit card responsibly and prevent any issues with your credit score or issuer.
That said, just because your name is on the credit card doesn’t mean you’re responsible for all credit card obligations.
Is a Cardholder Legally Liable for the Debt Incurred on Credit Card?
Whether a cardholder is legally liable for the debt incurred on their credit card depends on whether they’re the primary or secondary cardholder.
A primary cardholder, also known as the borrower, is the main user of a credit card account and the person responsible for repaying debt and maintaining a good credit score.
This means that a primary cardholder is legally liable for the debt that they incur on their credit card.
Even if the charges and debts on a credit card were incurred using a secondary card, the primary cardholder is still obligated to repay the charges and debt.
It’s a completely different story if you’re a secondary cardholder, though!
Is a Secondary Cardholder Legally Liable for the Debt Incurred on Credit Card?
The simple answer is that you’re not legally liable for the debt incurred on a credit card if you’re a secondary/authorized cardholder. Now that you can breathe a sigh of relief, let’s take a closer look at what it means to be a secondary cardholder.
A secondary cardholder is also known as an authorized user or a supplementary cardholder. Being a secondary cardholder means that a primary cardholder has given you access to their account, which means you can make purchases using someone else’s credit account.
Many people make their spouses and partners authorized users. Some parents may even add their teenagers as secondary cardholders to help them build credit history and learn how to responsibly use credit cards.
Most importantly, if you’re a secondary cardholder, you’re not legally liable for any and all credit card charges or debt. The person whose name appears on the credit card is fully liable for all charges made.
Ethically, however, you should strive to help your primary cardholder maintain a good credit score and avoid incurring unnecessary debt.
Just keep in mind that credit card terms and conditions may differ from one another. That’s why it’s crucial to read the cardholder agreement to ensure that you fully understand your rights and obligations, whether you’re a primary or secondary user.
Is a Cardholder Legally Liable for Unauthorized Use of Credit Card?
Whether you’re a primary cardholder or a secondary cardholder, you’re not legally liable for any unauthorized use of the credit card. Federal laws actually place limits on personal liability for unauthorized credit card charges, ATM withdrawals, and debit purchases.
In fact, most credit card issuers offer zero-liability policies that absolve cardholders of liability for unauthorized credit card charges, protecting them from the consequences of theft and fraud.
These policies are applied to all unauthorized transactions made in person, online, through a mobile app, or by phone.
If you ever find yourself in a situation where you notice fraudulent transactions on your credit card, you must immediately notify your credit card issuer.
Notifying your card issuer is one of the requirements that must be met in order for you to have no liability for any misuse, and it must be done within 30 days. After that time frame, you’ll only be liable for any debt incurred prior to notifying the issuer.
In most cases, if charges have already been made using your credit card, you’ll only be liable for $50. You won’t be liable for any amount above that. Some credit card issuers may even waive those $50.
That said, zero-liability policies may have some exceptions, which are usually outlined in the cardholder agreements. Some exceptions can include commercial credit card transactions and foreign transactions.
Does a Joint Account Holder Have the Same Legal Credit Card Liabilities?
Aside from adding an authorized user, you can share a credit card with another person by becoming joint account holders. The main difference between being an authorized user and a joint account holder boils down to who’s responsible for paying off the balance.
In a joint account, all parties are equally liable for any fees or charges incurred. Joint account holders are considered co-borrowers, having the same rights and obligations as a primary cardholder would.
To the credit card issuer, all joint account holders are fully liable for charges and debt repayment. Because everyone is 100% liable in a joint account, charges and debt are divided among the account holders.
Even in the case of marital separation, both joint account holders remain liable to pay the credit card debt until it’s satisfied or otherwise discharged.
While being a joint account holder can help all account holders improve their credit score, joint debts can be risky if one party is financially unreliable.
For example, if one joint account holder accumulates debt and files for bankruptcy, creditors have the right to pursue other joint account holders for repayment. At the same time, bankruptcy absolves the bankrupt from responsibility to repay the debt.
In Conclusion
There’s no problem with asking questions like, “What is a cardholder name?”
A credit card is an extremely powerful financial tool that can be both beneficial and detrimental, so it’s crucial to understand all of the basic relevant terms to avoid any confusion.
What’s more, having basic knowledge of your legal responsibilities as a cardholder is essential to ensuring that you know your rights as a cardholder and the rights of your card issuer.
That said, credit cards and cardholder agreements can be difficult to understand at first, especially if no one teaches you about all of their nooks and crannies.
That’s why it’s always a good idea to contact your credit card issuer with any questions or concerns to ensure that you get the most out of your credit card without any issues.
Editor's Note:
At Personal Finance Guru, we want to help you maximize your lifestyle through personal finance. You can trust the integrity of our independent financial advice. Our opinions our own and have not been provided, review, approved, or endorsed by any advertiser or financial product provider. To support and grow the site, however, we may receive compensation from the issuers of some products.