When Somebody Else uses a Credit Card

Card with Mask
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Credit and debit cards are handy tools for payment. They’re so handy that sometimes they get passed around, stolen, or otherwise used in ways that weren’t intended. When anybody besides the named cardholder uses a card, you’ve got the potential for problems.

Unauthorized Use

Fraudulent or unauthorized use is obviously a problem. If your card gets used without your permission, simply report it to your card issuer (or your bank, if it’s a debit card).

In most cases you are not responsible for fraudulent charges, but you need to notify the bank quickly. The longer you wait, the more your liability increases.

To make a claim, you might need to file a police report, and the individual who used the card may face criminal charges (more on that below).

Does Permission Matter?

What happens when you use somebody else’s card with permission (or you allow somebody to use your card)? Even with permission, this is against the card issuer’s rules, so the cardholder is breaking the agreement they made with the issuer.

Most of the time, nobody will notice or care, but it’s worth knowing that it’s against the rules. When you consider how easy it is to make self-service payments (at gas pumps or online stores, for example), it's not surprising that cards are often used by friends, spouses, employees, and others.

If your bank or credit card company finds out that you’re lending out your card, there’s a chance that your account will be closed.

Plus, you can’t be sure that the card will only be used in the way you intended. Giving out your card is risky; you can’t recover funds if you let somebody use your card, and the bank won’t reimburse you if somebody drains your account at an ATM (which should only be possible if you had given them your PIN, and banks frown on that practice).

There’s also plenty of risk for anybody who uses another person’s card: it can look like you’re using the card fraudulently, and nobody really knows if you got permission ahead of time. If a merchant asks for identification and you can’t provide it, things might get complicated – the card might be taken, the police might get involved, and so on. What’s more, the person who gave you the card can later claim that you took it without permission (if you spend too much, for example, or if your relationship sours); in many cases there will be transaction records and store surveillance video that can be used to bring charges against you.

If you must use somebody else’s card (which you simply shouldn’t do), at least get a signed note from the cardholder saying you have permission to do so. Keep the note tucked away unless you really need it. If you use the card at a store, the merchant does not want to know that you have somebody else's card – they're risking a chargeback and there's nothing they can do about it unless the authorized cardholder made the purchase.

Unauthorized Use

When permission is not given, using somebody else’s debit or credit card is a form of identity theft. States increasingly view certain activities as ID theft, and penalties for those activities are getting more severe.

The details vary from state to state, so visit with a local attorney if you have questions regarding your particular situation.

In many states, possession of somebody else’s card is illegal. Possession of multiple cards – or other financial tools – can easily bring the crime into felony territory (if it wasn’t already a felony). In addition to criminal charges, victims (account holders) might be entitled to restitution.

If you’ve got your hands on somebody else’s cards, you’re playing with fire. It doesn’t matter what you intend to use the cards for – if you can’t prove that you have permission, you’ve got problems. That means you can’t “borrow” with intentions to repay the cardholder, and you can’t even use the card for benefits that won’t cost the cardholder any money (free access to certain places or services, or the purchase of goods that you’ll return before the bill is due).

It also doesn’t matter how you got ahold of the cards (if they were sent to you in error or if you found them on the street, for example) – it’s a bad idea to hang onto anything that might make you look like an identity thief.

Beyond Cards

Debit and credit cards are not the only way to trigger identity theft charges. Many states outlaw the unauthorized possession of any “financial transaction device,” such as:

It may also be illegal to possess information that can be used for access to accounts and account information such as:

  • Usernames and passwords
  • Social Security Numbers
  • An individual’s Mother’s maiden name (you might know this about anybody, so the facts and circumstances are important – a spreadsheet with this information is obviously more problematic than your casual knowledge of a friend’s maiden name)
  • Other personal information

Finally, it’s generally illegal to possess tools for financial identity theft, such as card skimmers and similar equipment.