Loaning Your Credit Card to Family and Friends Comes with Big Consequences

SALT LAKE CITY, Utah —Ever loaned your credit card to a friend or relative? Or bought something using someone else’s card?

Those are questions we asked people downtown recently.

“It’s my credit card and I don’t want other people buying things with it,” answered Spencer Shull.

“I don’t trust other people with my credit,” Lianna Bryans told us. “I have to be with them if they’re going to make a purchase.”

Nearly half of over 2,000 people recently surveyed by CreditCards.com said they have loaned their credit cards to other people. Over a third in that group said it did not work out well. Scott Stalnaker had that experience when he let a close relative use one of his cards.

“Just charging things they should not have,” Stalnaker explained.

He said it got to the point where he cancelled the credit card.

No law is broken by lending someone else your card, but it will likely violate the cardholder agreement.

“You need to understand exactly what a liability you’re assuming when you take actions with your card,” said Rob Woellhaf, Mountain America Credit Union’s VP of Fraud Management. “So, generally, if you give your card out to someone else, any transaction they do, you would be responsible for those transactions.”

Woellhaf said you could lose the card’s fraud protection benefits if you loan it out and it gets lost or stolen and then used fraudulently.

“It depends on the specifics of each individual cardholder agreement,” Woelhaff elaborated. “It may not be that you’re violating your agreement but you may be accepting more liability than you realize. So, you want to be very careful about who you lend your credit or debit card to.”

Another possibility: Your college-bound kid borrows your card to buy a television for their dorm but then decides to also buy an Xbox and stereo. You’re likely going to be stuck paying for those. Woellhaf compared it to loaning out your car.

“Once you give them the keys and they take your car, it’s out of your control. You have no control over where they go and what they do with it,” he remarked. “I have a lot of friends that I like and like to be with, but I wouldn’t necessarily let them drive my car.”

Better alternatives to loaning someone your credit card include using prepaid debit cards or money transfer apps like Zelle or Venmo.

Another option — many cards allow you to add authorized users. That will still make you ultimately responsible for their transactions on your card, but it doesn’t break the card agreement and keeps the fraud protection benefits intact.