Don’t Loan Credit Cards!
The interesting study
Making loans to friends and family is a well-known way to ruin your relationship. But now it appears that consumers are finding a new spin on a very bad idea. A CreditCards.com survey polled 2,253 U.S. adults to ask them if they ever decided to loan credit cards to friends or family.
The big result
49% of credit users surveyed admitted they’d loaned a credit card to a spouse, child, friend, co-worker or other person. More than one third of those (35%) who decided to loan credit cards to a loved one ran into trouble.
The fascinating details
People were most likely to lend their cards to loved ones:
- 30% gave it to their spouse or partner
- 21% handed their card over to their kid
- 9% decided it would be a good idea to loan credit cards to friends
- 4% let a co-worker use it
On the other hand, 39% of all people surveyed said they would never loan credit cards in any circumstances – even to family.
People are also pretty generous about how much they’re willing to give. Almost half (49%) said they’d be fine if someone charged up to $100, and 11% were fine with $1,000.
Among the negative outcomes experienced for loaning a credit card?
- 19% realized the card user charged more than they said they would
- 14% got no help when it was time to repay the debt
- 10% never got their card back
Millennials were the most likely group to be okay with loaning credit cards, but they were also the most likely never to get their cards back.
What you can do
“Never loan credit cards!” exclaims Gary Herman, “This is a worse idea than making a loan to a family member. With a loan, you at least give them a finite amount of money that you choose to give. If you give them your credit cards, they could potentially run up thousands of dollars of debt in your name!”
Herman acknowledges that there may be times when you feel comfortable using your credit line for someone else. However, he encourages you to make the transaction for them instead of giving them free rein with your account.
“Whether it’s a loan or lending your credit line, you should only extend the invitation if you have no expectation of getting paid back,” Herman explains. “But even so, go with the person to make the transaction or fill in the online form yourself. Never give out your full account details including the number, expiration and CSV. If you do, there’s nothing to stop them from running your balance up to the limit.”