Can I Let Someone Else Use My Credit Card?

It might seem convenient to let someone else use your credit card, perhaps for an emergency or to help a family member. However, this act carries significant financial and legal implications that many individuals overlook. Understanding these potential consequences is crucial before making such a decision. Sharing your credit card can expose you to unexpected liabilities, impact your financial standing, and even strain personal relationships.

Your Cardholder Agreement

A credit card represents a legally binding contract between you, the cardholder, and the credit card issuer. This agreement outlines the precise terms and conditions governing the use of your credit account, detailing aspects such as interest rates, fees, payment schedules, and crucially, who is authorized to use the card.

These agreements typically specify that only the named cardholder or individuals explicitly added as authorized users are permitted to make purchases. Violating these terms by allowing an unauthorized person to use your card can lead to severe repercussions. The card issuer might close your account, revoke your privileges, or even pursue legal action against you for breach of contract. Such actions can negatively affect your credit history and future ability to obtain credit.

To review your specific cardholder agreement, you can often find it on the credit card issuer’s website by logging into your account, or by requesting a physical copy. Federal law requires card issuers to make these agreements accessible. Familiarizing yourself with these terms ensures you understand your obligations and the potential risks associated with sharing your credit card.

Liability for Card Use

A major distinction exists between “unauthorized use” and “authorized use” of a credit card, which profoundly impacts your financial liability. Unauthorized use refers to situations where your card is used without your permission, such as in cases of theft or fraud. Under the Fair Credit Billing Act (FCBA), your liability for true unauthorized use is generally limited to $50, provided you report the issue to your card issuer promptly. Many card issuers even offer zero-liability policies, meaning you may not be responsible for any fraudulent charges if reported in time.

However, if you willingly give your credit card and permission to another person to use it, any charges made by that individual are considered “authorized use.” In this scenario, the protections offered by the FCBA for unauthorized use do not apply. You, as the primary cardholder, are fully liable for all purchases made. This remains true even if the person exceeds an agreed-upon spending limit or makes purchases you did not intend. The credit card company holds you entirely responsible for the debt incurred.

Should the person you lent your card to fail to repay you for their charges, you would still be obligated to pay the credit card issuer. This can lead to significant financial strain, including accumulating interest charges, late payment fees, and a negative impact on your credit score if payments are missed. Recovering funds from the person who used your card can be challenging, often leading to personal conflicts or legal disputes, as the credit card company will not intervene in such private arrangements.

Authorized Users

Adding someone as an authorized user is a structured alternative to simply lending your credit card, offering a defined way to share credit access while maintaining some control. An authorized user receives their own credit card linked to your primary account, allowing them to make purchases. The process typically involves providing the card issuer with the authorized user’s full name, date of birth, and sometimes their Social Security Number.

As the primary cardholder, you remain solely responsible for all debt incurred on the account, including charges made by the authorized user. The authorized user has no legal obligation to pay the credit card company. This means that any missed payments or high balances caused by their spending will negatively impact your credit score, not theirs, though their credit score can be affected positively or negatively depending on how the account is managed.

A significant benefit of adding an authorized user is the potential for them to build their own credit history, as the account activity is often reported to credit bureaus for both parties. You also retain the ability to set spending limits for authorized users with some card issuers, or to remove them from the account at any time. Removing an authorized user can usually be done quickly online or by contacting the card issuer directly.