Credit card liability

[Rtig]

I have a relative that's in a bit of a bind financially.

I'm not in a position to help them with a loan etc but I could add them as an authorised user on my credit card with their own card to see them through what should be a fairly short time of hardship.

My only concern with this is ultimately being lumbered with the full amount of what they spend if they decide to not pay me back. Would I have any comeback legally or would I be completely liable as I have added them as an authorised user?

[wibble cb]

If it was a true joint account, I think the words are jointly and severally liable , meaning you would both be on the hook should the other card holder fail to make payments, but if this person just has an extra card issued on your account, it’s down to you 100% as the account holder/owner.

Happy to be corrected if wrong though.

[craigjm]

Loaning money to someone is usually the quickest way of destroying relationships. Think very carefully if you really want to do this. You would of course be liable for anything they spend and didn’t pay

[BlackTails]

You would be liable in full to the card issuer. If your friend refused to reimburse you for their expenditure, your recourse is to sue them for that money. You would do well to have an express agreement between you and them drawn up before you add them as a cardholder, stipulating that they are liable to you for all expenditure they make with the card, plus the card issuer’s interest charges.

[Tony_T]

I’ve helped family & friends with loans in the past as I can’t seem to say no. I can’t stress this enough - don’t do it. There is a very good chance you will end up regretting it.

[loskie]

run a mile OP

If you cannot afford to GIFT them the money with absolutely ZERO strings or expectations DON'T

[irc]

Rtig said:

I have a relative that's in a bit of a bind financially.

I'm not in a position to help them with a loan etc

But you would be giving them a loan on your card with the added complication that you had no control over the size of loan.

If their position is so bad no commercial organisation will lend to the. Will you get your money back?

Is there credit union thry are eligible for? Citizens advice?

[davamer23]

Seems you already know they won’t be paying you back.

Don't do it, if you can’t afford to give them money, you can’t afford to let them use your credit.

[Red Devil]

Rtig said:

I have a relative that's in a bit of a bind financially.

I'm not in a position to help them with a loan etc but I could add them as an authorised user on my credit card with their own card to see them through what should be a fairly short time of hardship.

My only concern with this is ultimately being lumbered with the full amount of what they spend if they decide to not pay me back. Would I have any comeback legally or would I be completely liable as I have added them as an authorised user?

The short answer is yes. The primary card holder is legally solely responsible for all charges to the account. This is common across all issuers.
You also need to consider the risk of your relative's purchases causing your credit limit to be exceeded.
Your only comeback is against your relative. Up to you whether you go down that road with a formal binding payback agreement.
And that is only if you're willing to enforce it and they subsequently have the funds available to settle their debt to you.

[Tony1963]

What makes you say that it should be a short period of hardship?

[48k]

Rtig said:

I have a relative that's in a bit of a bind financially.

I'm not in a position to help them with a loan etc but I could add them as an authorised user on my credit card with their own card to see them through what should be a fairly short time of hardship.

My only concern with this is ultimately being lumbered with the full amount of what they spend if they decide to not pay me back. Would I have any comeback legally or would I be completely liable as I have added them as an authorised user?

Putting them on a credit card is even worse than giving a lump sum because it will be an almost never ending drip drip drip of money away from you whilst they build up more and more debt.
What if they max out your limit and you suddenly need to use your card?
Never ever ever lend a friend or family member money that you cannot afford to write off completely.
Don't do it. Just don't.

[alscar]

You would be completely liable.
It’s the same as adding my wife to my account - anything she buys I pay for.
If you cannot afford a simple cash loan then you 100% cannot afford to give them a credit card.

[Old Merc]

Everyone says you will be liable, so think very carefully.
How did this relative get into a bind financially. ? If he is a normal hard working type with assets, but has been scammed by a criminal. May be he is worth helping.
If he is a “plonker” , maxed his cards, gambled, lost his job etc etc. Walk away !!

Edited by Old Merc on Friday 22 August 08:16

[Aretnap]

wibble cb said:

If it was a true joint account, I think the words are jointly and severally liable , meaning you would both be on the hook should the other card holder fail to make payments...

Joint and several liability means that the creditor can demand the full amount from either of the parties, and will in practice usually look first towards whichever one seems more likely to be able to pay (almost certainly the OP by the sound of it).

So in practice it would be exactly the same situation for the OP as the more usual additional cardholder situation, where the principle cardholder is solely liable for the debt.

+1 for the "didn't do it, this is a really bad idea" crowd. If you can afford to, give your relative some money on a "pay me back when you feel able to" basis, accepting that this could well mean "never". If you can't afford to do that, you can't afford to help.

Edited by Aretnap on Friday 22 August 08:37

[Countdown]

OP

Just out of curiosity why are you thinking of going down this route rather than the significantly less hassle and risk of just lending them cash?

[bitchstewie]

Could consider a pre-paid credit card too.

[MustangGT]

There is no such thing as a 'loan' to a relative in reality.

Treat it as a gift, or don't do it.

[Pica-Pica]

Give or don’t give. No loan

(apologies to Yoda)

[Greshamst]

One additional factor that makes this a bad idea…

This may link you financially to them on your credit file, if you add them as an additional card holder.

I’d they are in a bad place financially, you do not want to be linked to them, as it will have a negative impact on you if you apply for other financial products.

[carl_w]

Can you not take money out of your credit card account and pay it into your bank account, then give them that?