Spendthrift daughter racks up thousands on mom's card

Mom cancels the card, calling the charges fraud

To Her Credit with Sally Herigstad

Sally Herigstad is a certified public accountant and the author of “Help! I Can't Pay My Bills: Surviving a Financial Crisis.” She writes “To Her Credit,” a weekly reader Q&A column about issues involving women and credit, for CreditCards.com. She also has written for MSN Money and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

Ask Sally a question, or see if your question has already been answered in the To Her Credit answer archive.

I gave my daughter permission to be on my card, and after she charged $1,500, I told her to stop. Then she took a friend on a trip to Denver on it. I canceled the card, but will she be charged with fraud?

As an authorized user, she didn’t commit fraud for using your credit card. It was a gross misuse of your trust, and 100 percent morally wrong, but that is between you and her. While the primary account holder is responsible for payment, your daughter should repay you and never be allowed to use your credit card again.
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Dear To Her Credit,
I gave my 20-year-old daughter permission to be on my Wells Fargo credit card, thinking she would use it for gas or maybe a meal until she got a few weeks of pay into her new job.

I find she has instead been spending frivolously and has run up a bill of $1,500. I told her not to use the card until the $1,500 was paid back. I got a “I’m sorry about my impulsiveness, and I will work on that” story.

My daughter and her friend had already made plans and purchased plane tickets to Denver using my card. I called the bank the day before she left and placed a hold on any purchases and again told her not to use the card.

A day later, I see a $993 hotel charge and other purchases! I called the card company and yelled at them to stop all charges and that I shouldn’t be responsible for them. They canceled the card and asked about all the charges she had made and said they would send them to the fraud department and that my daughter and I would not be held liable for these purchases.

I specifically asked them if my daughter would be in trouble, and they said no.

She is still in Denver and has a few more days at the hotel. Will the hotel kick her out? Will she not get in trouble? I do not want my daughter to be charged with fraud.  – Melissa

Dear Melissa,
I am getting mixed messages. Do you want the card placed on hold or not? Do you want your daughter to be held responsible or to face any consequences for her actions?

I understand your frustration, but I think you need to clarify what the limits are for your daughter and what you want the credit card company to do.

You did the right thing canceling the card. It may be too late for the hotel charges, because the hotel probably already had placed a hold of its own to cover room charges and incidental expenses.

Again, I’m not sure what you want the bank or hotel to do. Do you want them to kick her out because the card is canceled? You can’t hope the hotel lets them stay, and then want to reverse the charges.

Ultimately, the primary account holder is liable for an authorized user's charges

The fact that you gave your daughter permission to use your Wells Fargo card is significant.

In fact, if she is “on” your card as you say, you must have made her an authorized user.

Most Visa and Mastercard accounts have no halfway measure of adding someone to a card – they’re either on it or they’re not. (American Express cards may allow spending limits for authorized users.)

Since you authorized her to use the card, then you are ultimately liable for any charges. The only charges the card issuer may not hold you responsible for are the ones made after you called to request a block of all further charges.  

As an authorized user, your daughter didn’t commit fraud for using the card. It was a gross misuse of your trust, and 100 percent morally wrong, but that is between you and her.

The other problem with calling your daughter’s charges “fraud” is that if the bank truly does cancel them and your daughter doesn’t have to pay it back, what does that teach her? She gets a free vacation with her friend, with no consequences. I don’t think that’s in her best interest in the long term.

A lesson in credit card management is in order

It’s not uncommon for a young person holding a credit card for the first time to spend a little more than they expected. A few tanks of gas and incidental expenses, maybe even some clothes, can add up alarmingly fast.

Taking your credit card and flying to Denver – with a friend – all at your expense, is way over the line. She needs a hard lesson in honesty and what happens when you break someone’s trust. She also needs to find out what it takes to make that much money, or rather how long it takes to save that much money after paying all one’s own bills.

I recommend you have a hard talk with your daughter after she gets home. If you are very angry (I would be!) it might be a good idea to let her know that the talk is coming, but wait a week or two so you can speak without anger. Then, work out a payment plan for her to repay everything she purchased. If she is living rent free with you, she needs to start paying expenses, too.

Decide on clear limitations for your daughter. Write them down, and spell out what happens if she doesn’t keep her end of the bargain. You should both sign it, and make a copy for her, so she knows this is real.

If you are paying credit card interest, she should pay the portion attributable to her expenditures. And, as I’m sure you’ve learned, never add her to another one of your cards again.

Your daughter is a 20-year-old adult, and she is about to learn some hard lessons. It’s difficult for you, but you can do it.

By holding your daughter accountable and making sure she pays back what she spent, you can help her learn those lessons about financial responsibility and trust quickly, lessons she will remember for the rest of her life.

See related: When an authorized user goes rogue: What to do


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Updated: 11-16-2018