Sharing your credit card with friend or family? The hidden risks are costly

Voluntarily sharing details with others transfers the entire legal and financial liability to the primary cardholder

Sharing card credentials with friends or relatives may seem a harmless favour but it can lead to a costly mistake. The practice not only exposes users to fraud but can also damage credit scores and weaken long-term financial health, experts say.

 

You carry the entire legal burden 

Any transaction made after a cardholder voluntarily shares their card password or OTP is treated as authorised use, according to Saurabh Puri, chief business officer, Zaggle, a fintech company. This means the primary holder is liable for all spends, interest and penalties, even if someone else misuses the card.  "Even small favours can have big consequences: a card shared for a minor purchase could lead to thousands in unauthorised spending, with banks holding the primary cardholder fully liable said Manish Shara, co-founder and chief executive officer of ZET.

 

Puri cited as example a person who had shared a card with a cousin for an errand. The cousin spent Rs 1.8 lakh over several weeks. “Because the cardholder had voluntarily shared the card, the bank denied chargeback requests,” said Puri. The customer’s credit limit was reduced and their credit score dropped more than 70 points due to delayed repayments.

 

Overspending or late payments by someone else will still be recorded on the cardholder’s own credit file. Puri notes that the impact can be immediate:

 

High utilisation can trigger a 20–40 point drop

 

One 30-day late payment can shave off 60–100 points

 

Persistent overdue amounts can depress scores for six to twelve months

 

Such setbacks not only raise future borrowing costs but can also disrupt plans for home loans or business credit.

 

Fraud liability also falls on you

Even if misuse appears fraudulent, banks typically classify cases involving voluntarily shared cards as negligence. “For add-on cards or voluntarily shared cards, the primary holder remains 100 per cent liable unless there is proven cyber fraud,” Puri said. Defaults or over-limit spending by another user continue to affect the primary holder’s repayment obligation and bureau record.

 

Safer ways to help others

Experts recommend alternatives that offer control without exposing the cardholder.  Shara advises consumers to explore controlled alternatives such as add-on cards or secured credit products to help family members spend responsibly while safeguarding their own credit.  Secured cards allow individuals without a credit history to build one responsibly. RuPay-based credit on UPI can facilitate small, trackable spends. 

Keeping your credit card personal is more than a good habit, it is a practical safeguard in a high-fraud digital environment. A moment of convenience should not outweigh months of financial repair.