Can you let someone use your credit card or lend yours?

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Lending your credit card to a friend or family member may not seem like a bad decision, especially if you trust them. After all, if you give them permission and know exactly what they’re buying – what’s the harm? And you’ve likely never given it a second thought when someone lends you their credit card.

It may not be until much later that you suddenly find yourself wondering whether it’s even legal to use someone else’s credit card or lend out your card.  It’s one of those things that rarely crosses your mind, but the rules can be very specific, and the consequences even more severe.

While convenient, sharing credit cards is not the best decision when it comes to safeguarding your money.

Can Someone Use My Credit Card?

The answer ultimately depends on your card issuer and the terms of your credit card agreement. For some cards, yes, you can use someone’s card, or they can use yours with permission. This practice is not generally recommended, however.

Before you hand out your credit card, you should first consult your cardholder agreement to review the exact terms and conditions for your specific card. Most banks don’t encourage the sharing of cards, outlining very specific rules regarding the handling of your credit card. Others may prohibit the sharing of cards altogether.

Many banks will also hold you liable for any charges made on your card, regardless if you made the charge or you allowed someone else to use it.

The Risks of Sharing a Credit Card

If your cardholder agreement does not provide any information regarding the sharing of your card, you should proceed with caution. For some cards, yes, you can use someone’s card or they can use yours with permission. This practice is not generally recommended, however.

Your bank is not the only obstacle you may face when sharing cards. You could send your child or a friend to the store, only for them to be accused of credit card theft and fraud at the register.

Consider supplying the borrower with a note, so if a merchant has questions about the card, there is an explanation available. It protects the merchant from a false charge, and it reduces the risk of a merchant confiscating your card or, worse, calling the authorities.

Overspending is one of the biggest issues reported by consumers, but there can be more serious consequences, too. If someone is caught using your credit card, you could face any of the following:

  • Steep fees and penalties
  • Lower credit limits
  • Revocation of your account
  • Legal charges

Credit card theft is a crime that is punishable at both the federal and state level.

Normal Protections May Not Apply

Federal law may not protect you, either. There are minimal federal protections from the Federal Trade Commission (FTC) that can limit cardholder liability to just $50, but these protections are no longer applicable if you willingly gave up your card for use.

The rules are pretty specific when it comes to fraud. If you willingly supply your card to another party for use, it then becomes your responsibility to resolve whatever debts may be incurred.

When you give an acquaintance permission to use your card, that person is then considered an authorized user while they are in possession of your card.

How to Handle Unauthorized Credit Charges

Even if you volunteer your card to another person to use, you could end up with charges on your account that you did not authorize. For example, if you send a friend to the store for milk and eggs, and they return with expensive electronics, there is going to be a problem over the bill.

So, what happens if that friend refuses to reimburse you for a purchase you did not authorize?

If you see charges on your account that you did not make or authorize, this is what you can do.

Notify the bank immediately

Call your card issuer to let them know that you have lost possession of the card, so they can turn off that card.

Review your statements

Make sure that there are not any other unauthorized charges on your account that need to be resolved.

File an identity theft report with the police

Credit card fraud is considered a form of identity theft, and the police can get the ball rolling with formal charges. Your card issuer will likely request a copy of the police report in order to process your claim.

Alternatives and Tips for Sharing Credit Cards

Try as much as possible to avoid loaning your card out. There are other ways to still get what you need without risking the security of your personal credit card.

If there is someone that you trust, you could add that person to your account as an authorized user. That way, there will be an actual credit card in that person’s name, and you won’t have to share cards anymore.

  • Tighten your account settings

Many companies will let you set custom credit card alerts based on your spending. When you make a purchase, your creditor will send an email or text message notifying you of the purchase. You can set alerts so that you only receive notifications for charges over a certain dollar amount. You can also set charge limits for any authorized users on the account, restricting how much they can spend on your account.

  • Review your statements

Just because someone was supposed to buy one thing doesn’t mean that they won’t buy another while they are at it, and if you don’t watch your statements, you could be none the wiser. It is always important to track your financial health, but reviewing your bank statements can also help you protect yourself from unauthorized spending.

  • Replace compromised cards

If you do find unauthorized charges on your credit card, it is a good idea to close the card and request a new one from the bank.

  • File statements away

If you leave your information out in the open, your account information can be vulnerable. Be sure to keep all of your checks, statements and financial documents put away for your use only.

Bottom Line

It’s never a good idea to share your credit card because at the end of the day, you cannot control another person’s spending. Your card issuer may have very strict rules against sharing your card, and you could be opening yourself up to more trouble than it is worth.

With credit card theft considered a form of identity theft, the penalties could be severe if criminal charges are filed, and you could find yourself on the hook for the entire bill, regardless of whether you made the purchase or not.