Many people are facing layoffs or job elimination due to their company closing its doors.  Some of these former employees were issued company credit cards with both their name and the company’s name on them for use with their job.  One person who lost their job started getting calls from a collection agency about the former employer’s credit card account.  Are they responsible to pay the company’s credit card bill and will it show up on their credit report?

According to Todd Ossenfort, “The Credit Guy”, probably not.  Most corporate credit card accounts are set up for employees to access and utilize the company’s credit in the course of their job duties.  Typically, the employee is added as an Authorized User (AU) to the corporate account.  As an AU, they are not financially responsible for the debt.    If they did not sign a credit card agreement, they should not be responsible.  

The Fair Debt Collection Practices Act (FDCPA) provides consumer rights that include requesting validation of the alleged debt to find out who it actually belongs to.  This should be done as soon as any collection agency contact has been made as there are FDCPA time limits.

The account should not show up on the former employee’s credit reports.  Even though Authorized User accounts that are personal, or individual, credit can be reported on the AU’s credit file, the employer’s credit card should not be on there because it was corporate credit, NOT personal.

If you are currently using your personal credit card for business expenses, you may want to explore different possibilities that do not put your personal credit at risk.  If your company asks you to sign for a credit card for job related purposes, consider declining as it is your good name and credit scores that will be adversly affected if something changes or goes wrong with the employer or the payment of the account.

.