Allowing friends to use your credit card = mistake

After the charges, it may be too late to hold another responsible

By Todd Ossenfort

The Credit Guy

The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues. Ask a question 'The Credit Guy' archives

Dear Credit Guy,
Can I make another person a joint account holder to a credit card where he made purchases that I authorized as the cardholder? If so, can I then be taken off the credit card and make that person the sole owner of those charges and credit card without affecting me in any way if payments to the credit card are not met by that individual?
-- Seidy

Dear Seidy,
Putting on the parachute after you jump out of the plane is always much more difficult than jumping with the chute already in place. Not impossible, but much more difficult.

Your question is somewhat confusing, but I believe what you are asking is whether or not you can make the person who made charges on your account financially responsible for the charges. The answer is a definite maybe, but only if you have the complete cooperation from the individual and that person has a good enough credit history to qualify for a credit card account.

The reason I began with the parachute analogy is because if you had worried about protecting yourself financially before allowing someone to make charges on your account, you would not be writing to me now trying to figure out how to put on the chute while falling at a tremendous rate of speed. But, we can't go back in time, so let's see what we can do to protect you.

First you need to communicate with the person who made the charges, and see if he agrees with you that he is responsible for them and is willing to do what is necessary to take on the responsibility for paying them. In order for the responsibility to be removed from you, the person will need to get an account of his own and have the balance from your card transferred to his own card. The reason for this is because your creditor will not let you out of your cardholder agreement. If the charges remain on your account, you will have the ultimate responsibility for paying what is owed.

The person should agree to both open an account and have the balance transferred in addition to qualifying for an account on his own. If that is the case, then you just need to have the patience to allow the person to get that done. Make sure you are receiving payment from him to keep the account current while the transfer is being done.

Should the person not be willing to take on the responsibility of transferring the debt into his name, you have a few choices. You can continue to request payment from him and for as long as he pays, keep paying down the balance on his charges. If he stops paying, you could sue him in small claims court to recover the money to pay the credit card. A verbal contract regarding the charges is sufficient to move forward, but it will be your job to prove in court that the contract exists. If the balance is significant (more than what you could file in small claims court), then you have the option to contact an attorney to sue him for payment. However, the burden of proof that you had a contract to repay is still on you.

Or, you could chalk this up to a very expensive lesson learned and moving forward always put on your parachute first when jumping from a plane.

Take care of your credit!

See related: 10 worst credit card mistakes, $65,000 cash advance for friend goes unpaid

Todd Ossenfort is the chief operating officer for Pioneer Credit Counseling in Rapid City, S.D. Pioneer Credit Counseling has been a member of the Association of Independent Consumer Credit Counseling Agencies since 1997.

The Credit Guy answers a question about a debt or credit issue from a CreditCards.com reader each week. Send your question to The Credit Guy.

Published: June 22, 2009

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