How to get repaid for charges on a card you lent out

He borrowed your card, with permission, now he won't repay. Options?

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
I let my boyfriend use my credit card for about five or six months because he lost his job. We had the verbal agreement that he would pay it off with his income tax refund. So tax time came around, and he paid me back only $1,000. He racked up $5,000 in credit card debt on my account.

Now we have fallen out and he refuses to repay back. How can I go about getting the money he owes me? – Sheila

Answer

Dear Sheila,
Allowing someone to use your credit card is even worse than handing them your checkbook or giving them all the cash in your wallet. At least if you gave him cash, you couldn’t lose any money you don’t have. By letting him use your credit card, you were setting yourself up to lose money you don’t have yet, and that you may have to work a long time to pay off.

You know this now, but for anyone considering lending out their credit card, I’d suggest asking three questions first:

  • Why are you lending your card instead of giving or lending cash to this person?
    If it’s because you don’t have cash that you can afford to never get back, you can’t afford it. Give people rides to job interviews, cook hot meals or even lend your couch to friends and relatives. No one should lend money or let someone use their credit unless they are fine with never seeing that money again.

  • Why does he need the money?
    Yes, he lost his job. However, unless he is a young kid, he should have a backup plan by now. He has no savings or credit of his own, and he apparently thinks having too much income tax withheld from his pay qualifies as a savings plan. He doesn’t sound like a really good bet for being financially responsible with a credit card.

  • How are you going to get your money back if he can’t or won’t make good on his promise?
    It’s always hard to believe that a relationship can go bad, that a friend, romantic partner or even parent or child would borrow money and not pay it back. But it happens – all the time.

At this point, you have little power to force him to pay you back, short of taking legal action. He is not on the hook for your credit card balance. As far as the bank is concerned, letting someone use your card is the same as using it yourself.

If you really want to get your money from your former boyfriend, you need to take him to small claims court. Taking someone to small claims court is inexpensive and simple compared to going through the municipal court system. You generally represent yourself, which is important because hiring a lawyer could quickly cost more than the amount you are trying to collect.

The maximum amount you can sue for in small claims court varies by state, but in almost all states you should be able to sue for the remaining $4,000 he owes you. To get ready to file, gather all the evidence you can find, including emails, text messages and credit card statements. Take notes about everything you can remember, including dates and conversations.

You can find the rules for filing small claims court cases in your state by searching online. It’s mostly a matter of filling out forms and paying a fee. You must have someone serve your former boyfriend with a notice. He can either fight it and claim he doesn’t owe you the money, or ignore it and lose by default.  

Assuming you win in small claims court, you will then have a judgment against him. The next step is to get the money, by garnishing his wages or by attaching a lien to his assets, such as real estate or a car.

Don’t delay too long before you take him to court. The longer you wait, the harder it is for both of you, and any witnesses, to remember key details. If you wait too long, the statute of limitations could make it impossible for you to collect.

There’s always the chance that when he finds out you’re planning to take him to court, he may decide to pay up. You need to be serious, however. He didn’t follow through on his promise to repay, so you need to be prepared to follow through on your promise to collect. Following through is the best way you can protect your financial stability, and your peace of mind.

See related: It’s not fraud if you lend your card out, Use caution when adding a friend as an authorized user

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Updated: 11-22-2017