Keeping it Safe: What to do When Others Want to Borrow Your Credit Card

Information verified correct on September 27th, 2016

If you’re lending out your credit card, follow these tips to keep your credit card safe

If you have one or more credit cards it’s not unusual to lend them to family, or in rare cases friends, to make a payment. Most of the time this will probably be for a child of yours who wants to buy a concert ticket, or in the event they need to book a hotel room and don’t have access to a credit card for the bond.

This shouldn’t be something you do regularly, and in fact should be avoided whenever possible. Remember that in almost all cases lending out your credit card is considered by your lender as a security breach. If anything happens to the card or your account during the time that you lend it out you’re held liable, and there might also be other consequences. What’s more, lending your card to a friend who’s in need of money might leave you with a huge bill and no way to pay it off.

St.George Vertigo Visa

St.George Vertigo credit card

Focused on being a no-frills offer, the St.George Vertigo credit card has consistently been a competitive credit card, with a low purchase rate and a great rate for balance transfers.

  • $55 p.a. annual fee
  • 1% p.a. for 12 months (reverts to 13.24% p.a.) on purchases
  • 0% p.a. for 18 months on balance transfers
  • Cash Advance Rate of 21.49% p.a.
  • Up to 55 days interest free

Why you shouldn’t do it

There are a number of reasons why lending your plastic to a friend or family member isn’t always a good idea.

Not receiving payment - Essentially when you lend your credit card out you’re lending someone money. If this person is your teenage child who you know will pay you back then the risk is slightly lower, but still present. If the person in question is a friend or family member you haven’t seen in a while, or someone you know to be less than reliable with other things in their life it may be better to refuse.

If the person accessing your credit card has the cash to pay you back immediately then you may be safer.

What if they lose it? – There is always a chance when you physically lend someone your credit card that they may lose it or it may be stolen. Most cases of fraudulent credit card usage occur when somebody has lost their credit card and somebody else has picked it up, and then used it illegally.

Regular usage - The more you let someone use your credit card the more you can expect them to ask to use it in future. The more they use it, the bigger risk that you’re exposing yourself to is.

What should you do?

There are a couple of ways to limit the risk of lending your card out:

1. Only ever use your credit cards to help close family or friends that you trust 100%. The fewer people that make transactions with your card the better.

2. Be in control of the transaction. If you are paying for something over the phone make sure it’s you that is making the call. If you are buying something over the internet then make sure it’s you that processes the transaction.

If you are the one controlling the transaction then you can be certain as to what is spent, and what it’s being spent on. If the purchase is at a store go with your family or friend to see the transaction take place and hold your card on you at all times.

Additional cardholders

Rather than lend your card out to close family, it may be better to get them on your account as an additional cardholder.

Almost all credit cards allow at least one additional credit cardholder to be added to the account, and in many cases this is at no extra charge. You’ll still be liable for the spending that takes place on the secondary card, but the cardholder can access the same benefits you have, in addition to earning rewards points for your account if your card is a rewards card.

In most cases, supplementary cardholders don’t get access to all the aspects of your card account. They’re not for example able to raise the credit limit on the account. They can get access to information about the accounts and accounts linked to the card.

Whichever route you take, remember that a credit card isn’t like a debit card or bank account. With a credit card there’s the risk that whoever uses it spends up to your credit limit, which doesn’t necessarily mean you have the money to pay it off. Be sure that you understand the risks before lending your credit card to anyone, and if possible avoid this card use.

Shirley Liu

Shirley is a personal finance journalist for finder.com.au. She is passionate about educating readers about home loans and helping users navigate the area to find the best deal for their financial situation.

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Credit Cards Comparison

Rates last updated September 27th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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