Sharing your credit card with a friend might seem like a small help, but it can lead to serious financial trouble if you’re not careful. Credit cards are powerful financial tools, and any misuse can directly affect your credit score and future loan eligibility.
Before handing your credit card to a friend, try to understand their financial discipline. Are they good at repaying dues on time? If they delay the payment or miss it altogether, the responsibility comes back to you – the card owner. Any missed payment will affect your credit score, not theirs.
Always Track Repayments
If you give your credit card to someone else, make sure you keep track of their usage and payments. Always confirm whether they are paying the bill on time. A single missed or delayed payment can lower your CIBIL score, making it difficult for you to get home loans, car loans, or other credit in the future.
Risk of Misuse
Another risk is unauthorized use. If your card is used for illegal activities or suspicious transactions, you could be held responsible. For example, if it’s misused in online fraud or anti-social activities, it might lead to police complaints or legal action. So, always monitor card transactions.
Avoid Legal Issues
Banks issue credit cards based on your income and credit history. If someone else uses it irresponsibly, you might be answerable legally. It’s always better to avoid giving your card to others, even if they are close friends.
Credit cards should be used with caution. Lending it to others without proper checks can harm your credit health and lead to unnecessary problems. Only in emergencies, and with full trust and understanding, should you allow others to use your car and even then, keep a close watch.
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