36 million Americans have seen negative consequences from lending cards to others
Focusing on credit scores and what consumers can do to improve them
More than a third of Americans who have lent credit cards to
other people ended up getting stiffed, according to a new CreditCards.com poll.
In our scientific survey of 2,253 U.S. adults, 49 percent
who have ever owned a credit card admitted to lending their cards to spouses,
children, friends, co-workers or other people to make a purchase. But 35 percent
of those selfless cardholders saw negative consequences, including overspending
by the other person (19 percent), not getting repaid for the debt (14 percent)
and having the card lost, stolen or never returned (10 percent).
An extrapolation based on the U.S. adult population reveals
36 million people have suffered whiplash after letting someone else take their credit
cards for a spin.
“My guess is that a large segment of those individuals are
financial enablers,” said Brad Klontz, founder of the Financial Psychology
Institute. “In an attempt to help somebody, they either loan them money or
support them in some way that ends up hurting themselves. And it’s probably
feeding some financial dependence or money disorder on the other side.”
Here’s what else our survey on lending out credit cards
- We trust
family the most with our cards … Thirty percent of respondents who have
owned credit cards lent them to their spouses and partners, and 21 percent shared
their cards with their children. Only 9 percent lent cards to friends, and 4
percent let co-workers borrow their cards.
- … if we
trust them at all. However, 39 percent of all cardholders would never let
an immediate family member borrow a credit card.
- Most card
sharers are generous with their credit. Forty-nine percent of respondents
who have owned credit cards said they’d be amenable to letting an immediate
family member ring up $100 or more on their cards. Eleven percent said they’d
be OK with a spend of more than $1,000.
- Need a
credit card? Befriend a millennial. Respondents aged 18-37 were
significantly more likely than older adults to lend credit cards to their
friends. But they were also the most likely group to say cards they lent to
other people were lost or stolen.
- A master’s
in mutual trust. Respondents with post-graduate degrees were significantly
more likely to say nothing bad happened when they let others borrow their
The online survey of 2,253 U.S. adults was conducted Feb.
14-15, 2018. See survey methodology
An easy way to help
someone – and hurt yourself
If you lend your credit card to another person, there’s a
one-in-three chance you’ll end up losing money or the card itself. But despite
the potential risks, lending a card is an easy and convenient way to help
someone you care about, whether it’s your spouse, an immediate family member or
even a close friend. And for many of us, it’s hard to imagine a person you love
and trust stealing your card or sticking you with a debt.
“Money means a lot of things to a lot of people,” said
Jeffrey Shinal, a financial therapist and psychotherapist. “It can be treated
as a way to show love, affection and connection to people, and one of the
easiest ways to show care or love to others is by providing for them.”
Card sharing is common – even though issuers technically don’t
allow it – and there are any number of scenarios in which it’s harmless. You
may hand over your card to your significant other for a quick grocery shopping trip
while you’re tied up with other stuff. Perhaps you’re planning a vacation with
a good friend who doesn’t own a credit card, and you agree to let him purchase a
plane ticket online with your card as long as he immediately pays you back.
Slight overspending by your spouse or partner is usually no
big deal. And you might even let your friend slide if he is a little late repaying
you for that plane ticket because he spent all his money on room service and
booze during the vacation.
But a borrowed credit card can also be used like a blank
check, or it can be mishandled and end up getting lost or stolen.
“If you’re asking somebody to lend you a credit card …
you’re probably in a desperate place,” said Terrence Shulman, founder of the
Shulman Institute for Compulsive Theft, Spending and Hoarding. “When people are
desperate, they often bite off more than they can chew. They might promise to
pay things back in a while, but it’s not realistic.”
Letting someone use your card for their everyday expenses
can also foster unhealthy financial dependence. If you let a loved one such as
an adult child, a parent or a sibling use your card on an open-ended basis, it
may never occur to them to pay you back or even return the card.
Klontz noted that when people become psychologically
dependent on money they don’t earn, it often results in a lack of motivation
and compassion, and it can even create resentment between both parties.
“Financial enablers will very often resent the people
they’re giving money to, even though it’s coming out of the goodness of their
hearts,” Klontz said.
“Financial enablers will very often resent the people they’re giving money to, even though it’s coming out of the goodness of their hearts.”
A shared card can be
a weapon in a troubled relationship
Sharing a credit card with your significant other may seem
like the safest bet of all, but it can become a point of contention if the
relationship falls apart. In our survey, divorcees were significantly more
likely than married people to say that the people they lent their cards to
didn’t pay them back.
Unlike a card from a jointly held account, any debt incurred
on a borrowed card is the legal responsibility of the card owner. So, if one
spouse spends freely on a card borrowed from the other during the marriage, the
latter is still liable for repaying any debt that remains after divorce. A
free-spending spouse may refuse to pay back what’s owed on such a card after
the relationship ends, particularly if the card owner ended the relationship or
was abusive or unfaithful.
Financial therapy expert Debra Kaplan said credit cards are
often used for clandestine spending by the cheater in a marriage riven by
infidelity. But credit cards also can be used by the scorned lover for “revenge
spending” – a debt not likely to be repaid to the two-timer.
“The other individual in the relationship starts spending
money as a way to level the powerlessness, or as retribution or retaliation,”
Establish clear rules
for borrowing your card
If you want to help someone financially without putting your
card and your credit at risk, there are other options. You could just loan him cash or help him get
a prepaid card.
If you must lend someone your credit card, set firm ground
rules about how it will be used and when it will be returned.
Set a maximum amount that can be spent on any given item. You
may also require the other person to ask your permission before making any
purchases. And keep a close eye on your account activity to be sure no
unauthorized spending is taking place.
“If you’re really worried, you could actually just go with
them wherever they’re going to make the purchase,” Klontz said.
Shinal said that if the other person pushes back or bristles
at the idea of adhering to your restrictions, you should rescind the
“You want to feel confident in the character of the other
person and in the strength of your relationship, so that when you set ground
rules you know they will be respected,” he said.
CreditCards.com commissioned YouGov Plc
to conduct interviews with 2,253 adults living in the United States. The survey
was conducted online Feb. 14-15, 2018. Statistical results are weighted to
correct known demographic differences between the sample and the U.S. population.
See related: How to get repaid charges on a card you lent out, Is sharing your credit card ever OK?
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