If You Loaned Money to Family or Friends, Don't Count on Getting Paid Back

Lending cash to friends or family members ends badly about half the time. The lender either is not repaid or suffers damage to the relationship.

Still, 60% of Americans have lent cash to family members or friends, according to a new survey from Among those lenders, 46% have experienced a negative outcome: 37% lost money and 21% damaged their relationship with the borrower. Both occurred in a significant number of cases.

As is so often the case, Shakespeare had figured this out more than 400 years ago. In the first act of Hamlet, Polonius admonishes his son, Laertes, “Neither a borrower nor a lender be … .” Everyone’s heard that. It’s the next line that adds the necessary detail: “For loan oft loses both itself and friend … .”

Imagine what Polonius would have had to say about lending credit cards to a friend or co-signing for someone else’s loan or lease. Nearly a fifth of Americans (17%) have lent a credit card to someone and 21% have co-signed for a financial product like a loan or rental lease.

Bankrate suggests not lending cash to anyone unless you’re willing to lose all of it. Industry analyst Ted Rossman notes that if you still want to make the loan, “[T]ry to go into it with the idea that you don’t want to hurt the relationship. So if that means that you’ve got to swallow [the loss], … that needs to be your mental state going in.”

Among those Americans who have lent a credit card to a family member or friend, 21% have lost money, 16% have damaged the relationship and 12% took a hit to their credit scores.

Co-signers don’t fare well either. Of the 21% of Americans who have co-signed on a financial product for a friend or family member, 18% lost money, 21% reported damage to the relationship and 20% said their credit score was damaged.

Nearly 30% of parents report co-signing a loan for their adult children and, according to a different survey at, 45% of all co-signers have signed on behalf of a child or stepchild.

One last warning: Picking up the tab at a group event like a lunch or dinner is not much different from lending money to each individual. Among the 18% of those surveyed who have played Daddy Warbucks, 70% were not paid back at least one time, and among that group, 23% say this happens frequently. Once seems like it ought to be enough, no?

Could it be an age thing? More than a third (36%) of older millennials (30 to 38 years old) have picked up a group tab in order to rack up credit card reward points. Only 11% of older adults have done the same thing. The result of the millennials’ generosity is that three-quarters of those who have picked up the tab have not been paid back and 36% say this happens frequently. For those determined to pay frequently for entertaining their friends whether they get paid back or not, here are the best credit cards to have.

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