More than half of those people, 55%, experienced at least one negative result. The most common was losing the money outright, which happened to 44% of lenders, but the financial loss wasn’t always the worst of it. Another 26% said the debt damaged or destroyed the relationship, and roughly 4% reported that the situation turned physically violent. Ted Rossman, Bankrate’s principal analyst, advises against loaning money, using credit cards, or co-signing for a loan entirely. Because the outcomes have been consistently bad across every survey cycle Bankrate has run.
The reason loaning cash to loved ones fails so reliably is that it operates without any of the structures that keep formal loans on track. There’s no repayment schedule and no credit bureau watching, so the borrower never feels the weight of that debt the way they feel a mortgage payment or a car note coming due. Your loan quietly slides to the bottom of their priority list. While you notice every dinner out, every online shopping delivery, every vacation photo posted to Facebook. Most people in that position stay silent because saying something feels worse than absorbing the loss. And the relationship pays for it either way.
Credit cards make all of this worse because when you hand your card to someone, their spending becomes your debt. Whatever they charge shows up on your credit report as if you spent it yourself, and unlike a cash loan, where the damage stops at the amount you handed over, a credit card lets the balance keep climbing. Bankrate’s earlier survey cycles have consistently shown that lending a credit card leads to unauthorized charges more often than any other negative outcome. At that point, the money is gone, and the hit to your credit is already on the record.
If someone you care about needs financial help and you’re in a position to assist, Rossman’s advice is to treat it as a gift. Give what you can afford to lose and carry no expectation of seeing it again, because if you can’t afford to give it, you can’t afford to loan it. The Bankrate numbers make that clear. And when the request is specifically for your credit card, a better option is to help directly by covering a specific bill yourself or sitting down together to look at low-interest alternatives. That way, the help stays real without putting your credit on the line.
