When a credit card company issues you a card, it is for your use as the account holder. But there are gray areas in some cases, such as a situation where a father lends his credit card to a child or spouse. Explore the various issues when you give someone temporary authorization to use your credit card before you take this action.
Temporary Use
In some cases, you can give someone, such as a relative or friend, authorization to use your credit card account. You may also have to write a signed note authorizing the person. Giving away this information (credit card or digits) to anyone, even someone you know well, is a very risky decision. Also, allowing someone else to sign for transactions on your credit card could go against your credit card service agreement. Examine your creditor's rules before allowing someone to use the card.
You’re Responsible
When you allow someone to use your card, even temporarily, you accept full responsibility for any charges by that person. You must repay the debt. If the person makes charges you don't agree with, you cannot report it as fraud since you agreed to allow him access to the account. According to the Fair Credit Billing Act, "unauthorized" charges are covered in the case of a dispute, so if you authorized this temporary use, it isn't covered. Even if the person returns your card, he may still have the numbers and can process online transactions.
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Additional Card
A logical solution for giving someone temporary authorization is to call your credit card company and ask for an additional card in the person's name. The account remains in your name, but the additional card holder has access to the available funds. You can cancel the additional card when you want.
Another Alternative
Some situations call for a credit card, such as when you have a child in school who needs to purchase textbooks online. Instead of giving the child temporary authorization to use your credit card, buy him a prepaid debit card to use instead. Visit your bank and ask for a prepaid debit card. Add funds that meet or exceed his needs. The student may have to pay fees associated with use of the card. In some cases, you can reload the card with more funds.
