Thread Rating:
  • 2 Vote(s) - 4 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Lending your credit card
#1
Star 
Have you heard about lending credit cards to others but in return the borrower will have to pay with interest? I've been hearing a lot of this kind of scheme very often. The credit card owners will allow swiping their cards to those who don't have a credit card. Sometimes the borrower wants to buy something, not in cash but they want to buy it in installment using a credit card. Credit owners will have an agreement with the borrower to pay installment but with interest, I think 10% depends on the agreement. So this kind of scheme credit owner has the chance to increase their credit limit every year and collects interest so they earn money from it.  It's kind of a good business because you will earn something without investing money.  

I don't know about the law when it comes to a credit card but this kind of scheme, is this legal or not?
Reply
#2
I heard about lending credit card for a return of interest. In fact, my friend is doing this for a long time. She used to collect 10% of the total amount for every borrower within a cycle period of payment. For instance, if you use her card to pay a thing in installment basis for 12 months at 0% interest, she will collect 10% interest monthly giving her 120% in a year round. As what I know, this is not legal because only legal owners should and must use any financial tool unless otherwise you are an attorney-in-fact recognize by the bank or unless you applied credit card for business. I think it would be best to use your own credit card in a profit making business in a more legal way for your own protection as well.
Reply
#3
The credit card provider has no way of knowing that an item was purchased for another person because it's the cardholder who swipes the card. It all sounds legal in that aspect. However, since you're making money out of it by charging interest, it becomes an income generating activity that must be registered as a business and/or supported by documents if you want to have legal protection for it. If the friend or customer runs away from the debt, for instance, you may not be able to run after him/her without incriminating yourself.

I'm not sure if this is still prevalent because there are now other options for people without credit cards. One is Home Credit. Some appliance stores also have store cards that allow members to borrow items on installment.
Reply
#4
It is absolutely a good business wherein you can earn a good amount, but there are risks. In terms of legality, in what I see and in my opinion, it is legal. The owner of the card is the one responsible for his/her card and he/she is the one who uses it for the borrower. The interest given to the borrower of the card is outside the business of the credit card company. The only thing people who does this have to keep in mind is the risk of having no compensation for lending cards. Scams are a sure thing in this type of business. The biggest problem is, you can't ask for help from the company since you're the one who allowed the transaction.
Reply
#5
(01-04-2018, 06:05 AM)Camilla Wrote: The credit card provider has no way of knowing that an item was purchased for another person because it's the cardholder who swipes the card. It all sounds legal in that aspect. However, since you're making money out of it by charging interest, it becomes an income generating activity that must be registered as a business and/or supported by documents if you want to have legal protection for it. If the friend or customer runs away from the debt, for instance, you may not be able to run after him/her without incriminating yourself.

I'm not sure if this is still prevalent because there are now other options for people without credit cards. One is Home Credit. Some  appliance stores also have store cards that allow members to borrow items on installment.

Yes, I've heard about Home Credit but the bad thing about it, not everyone can avail it. They must submit requirements first before applying for membership. I think they're also gonna need a proof that you're employed and have payment slip. I've heard also that Home Credit has biggest interest rate than credit cards so others choosing to borrow a credit card with monthly interest. And also you need to make a downpayment first before purchasing an item with them. Downpayment is kind of high so they rather choose borrowing a credit card than home credit.
Reply
#6
I though only atm card can be lend but now I know that credit cards can be lend too. But I think this is not a good Idea specially if the person where you will lend your atm was not to close to you and you dont know him/her very well there is a tendency that he/she will scam you. So you have to be vigilant when it comes to lending your credit cards or atm card.
Reply
#7
lending credit card is obviously happens and exist. I've heard such kind of stories that cardholder offers the privilege of using his card to purchase something from a colleague for instance or vise versa, a colleague asked a favor to ride to a credit card having an interest charge offered just returning the favor. Its like mutual internal arrangement with both parties.
Reply
#8
(01-04-2018, 11:07 AM)Dictator20 Wrote: I though only atm card can be lend but now I know that credit cards can be lend too. But I think this is not a good Idea specially if the person where you will lend your atm was not to close to you and you dont know him/her very well there is a tendency that he/she will scam you. So you have to be vigilant when it comes to lending your credit cards or atm card.

Any wise individual wouldn't lend his credit card or debit card to someone who is not familiar with him for security purposes. First of all, the individual whom you lend your card will have access to all your funds and can withdraw all or buy so much on credit using your credit card. Should such individual decide to elope with your cards, there won't be any means of getting your money or cards back, thereby leaving you with so much debt. 

Personally, I wouldn't lend any of my cards to anyone not even for any amount of interest because I'm not that greedy for quick cash. It's better for me to safe and secure with my cash all in my card and bank account than looking to earning more but eventually fall prey to scammers.
Reply
#9
To be honest with you guys i use this method and the borrower just takes 30% commission of the money I'm going to pay for the service or the product am buying from the Internet, so it's very costly. But I have no other solutions so I have to pay this high Commission rate.
Reply
#10
It does exist. People now a days are very resourceful when it comes to getting some quick money or on how to earn money. But personally I will not going to avail such thing since the interest will just double, imagine the credit card alone have its interest already added the interest of the card owner. That will just burn your money twice.
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)