A credit card makes it easy to purchase items and access funds, and you might occasionally want to allow a family member to use your card in an emergency or when you want to loan her money. But if you're careless about keeping track of another person's spending on your card, you can land in financial trouble. Getting a joint account might be an easier way to share a card.
If you give your express consent, a family member may be able to use your credit card. However, some merchants might not allow the loved one to use it. You may need to draft a signed, notarized letter granting your family member permission to use it. And even then, a merchant might not accept it. If the family member is an authorized user on your account but doesn't have a card with her name on it yet, a merchant still might not let her use the card without the letter. Merchants generally don't want to risk having a charge reversed because someone who wasn't allowed to use the card made a purchase. It's illegal for anyone, even a family member, to use your credit card without your consent.
Even if a family member spends more on your card than you told her she could, you're still stuck with the balance. A skyrocketing credit card balance can harm your credit, and your credit card company is unlikely to remove a transaction someone made with your authorization. If you allow someone else to use your card as a loan, be sure to draw up a loan contract. Lending money to loved ones can be an emotionally and financially hazardous choice, particularly if you aren't repaid.
Liability for Use
A family member can't be liable for the charges she puts on your card if her name is not on the account. So even if you're paying for someone else's purchase, you'll be stuck with the balance. However, if you have a joint account with a family member, you're both liable for the balance. However, if she refuses to pay, your credit could still take a hit.
If you want to give a family member access to your credit card, consider adding her as an authorized user on the account. She'll get her own card and won't have to worry about proving she's authorized to use it. However, authorized users aren't usually liable for purchases made on the account, which means you'll have to pay for any debt she builds. If you want to share liability, you may want to consider opening up a joint credit card account. Then you'll both be responsible for the balance.
Even when you and a family member share liability on a card, your credit can be damaged by her purchases, so be very careful when allowing a family member access to your credit. Having your family member as a joint account holder won't relieve you of responsibility; it just means that her credit will also be damaged if she overspends. The consequences of an irresponsible family member can be disastrous. You could be sued for the balance, end up going over your credit limit or see a drop in your credit score if she overspends or if you are unable to cover the cost of her purchases.
- Bankrate.com: Sharing Credit Card Accounts
- Consumer Action: Families and Credit Cards
- Federal Trade Commission: Protecting Against Credit Card Fraud
- Consumer Financial Protection Bureau. "Am I Responsible for Charges on a Joint Credit Card Account if I Didn’t Make Them?" Accessed Oct. 23, 2020.
- Consumer Financial Protection Bureau. "Do Joint Credit Card Accounts With My Spouse Affect My Credit Score?" Accessed Oct. 23, 2020.
- Consumer Financial Protection Bureau. "How Do I Remove an Authorized User From My Credit Card Account?" Accessed Oct. 23, 2020.
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.