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You might have a friend or family member who is experiencing some trouble with their high-interest debts. If you have a credit card that’s advertising a balance transfer promotion, you may consider allowing the individual to move their debt over to your account, whether as a joint account holder or as a secondary cardholder.

Doing so can certainly help the other person out. But it can also put you in a risky situation, especially if the other person fails to help keep up with payments.

So, should you extend some help to a friend or member of your family to allow them to transfer their credit card balance over to yours? Let’s take a closer look at this arrangement to help you decide if this is the right thing for you to do. 

What Is A Balance Transfer? 

Balance transfers let you move your debt between different accounts. They’re meant to help consumers get rid of their high-interest debt and take advantage of a lower rate to save money. 

Can You Transfer Debt From One Person To Another Person? 

Banks typically allow a balance to be transferred from one person to another using two different methods:

Joint Accounts 

If you currently hold a joint account with another person, you both share the responsibility of paying down the debt, along with any balance that is transferred onto it. You can either apply for the joint credit card account together at the same time, or you may add the other person after you’ve applied for the account. 

Banks will typically allow account holders to transfer debt to the other person’s new credit card account, though this will ultimately depend on the type of account you intend to use for the balance transfer. 

Balance Transfer Between Two People

If you want to transfer your debt to another person that you do not hold a joint account with, you can transfer the balance from the other person’s credit card to yours, or vice versa. The other person’s name would be removed from the debt, and yours would be inserted as a replacement.  

When this happens, the person left with their name on the account will be solely responsible for paying the debt. 

Adding Someone As A Secondary Cardholder Vs Joint Cardholders

There’s a difference between secondary and joint cardholders, which is important to understand as it can affect your balance transfer options and legal rights when debt is shared or transferred. The following table illustrates the difference between the two:

Joint CardholdersSecondary Cardholders
Applying for a CardTwo people applied for a credit card with both cardholders’ names on the account and both are responsible for the debt.  One person applied for a credit card in their name who shares the account with another person. 
Control Over AccountBoth cardholders can make changes to credit limits, freeze the account, or close the account.Only the primary cardholder can make changes to credit limits, freeze the account, or close the account.
Income and Credit ScoresBoth partners earn a regular income and have good credit scores.Only the primary cardholder must have a regular income and good credit score.
Debt Payments Both cardholders are responsible for all transactions and debt payments.Primary cardholder is solely responsible for all transactions and debt payments.
Account Closures in the Event of Dovorce or SeparationBoth cardholders may have to pay half of the debt each in the event of the account’s closure. Primary cardholder is solely responsible for the debt on the card in the event of the account’s closure. 

Check out our debt management tips for credit users.

Risks Of Letting Someone Else Balance Transfer Onto Your Credit Card 

While transferring a high-interest balance over to a lower-balance credit card account can help you save money with a lower interest rate, there are some potential risks that you may want to consider before moving your debt:

Your Credit Score May Be Negatively Affected

If you allow someone to transfer their debt to your credit card, your credit rating could be negatively impacted. Payment history is a significant factor that impacts credit scores, so even one missed payment can hurt your credit rating. 

Your credit utilization ratio can also suffer, which also plays a role in credit scores. If you carry a larger balance, your ratio will increase, which is not a good thing for credit scores. Further, the longer it takes for you to reply to the balance, the more at-risk your credit score will be. 

Your Relationship May Be Negatively Affected

Money is one of those topics that can cause a rift between friends and family. If you shift the responsibility of paying the debt to another person who doesn’t follow through with their obligations, this can cause major issues between you and the other individual. 

The fallout of unpaid debt can include a hit to your credit rating, as mentioned, as well as your ability to secure loans in the future. Consider the potential negative effects of your relationship if the other person does not hold up their end of the bargain after a balance is transferred.

You’re Responsible For Someone Else’s Debt

Taking care of your own debt can be challenging enough, but being responsible for someone else’s debt is another story. If the other individual does not pay the debt in full like they’re supposed to, you will be on the hook for paying it off. Since your name is on the credit card account, the credit card issuer will come after you for the money if they can’t get it from the other person. 

Tips For Letting Someone Else Transfer A Balance Onto Your Credit Card 

To avoid any of the potential issues just mentioned when transferring a balance from one person to another, consider the following tips:

  • Discuss payments before transferring the balance. Before you add a secondary cardholder or apply for a joint account with another person, make sure you’re both on board with making timely payments. Discuss how and when payments will be made before applying for a new credit card or transferring a balance to avoid any potential payment issues.  
  • Make sure balance transfers from another person are allowed. Before you make an attempt to move debt from one account to another, make sure the account you plan to open allows such a transfer to be made. Verify these details first before you open a new account or apply for a transfer. 
  • Watch out for a fee. There may be a balance transfer fee applicable to the transaction, which may vary among credit card issuers.  
  • Review the balance transfer terms and rates. Low balance transfer interest rates are usually only offered for a temporary amount of time, after which the rate will increase. Find out how long the introductory is good for, and what the rate will be once that period is over.

Alternative Options To Letting Someone Else Balance Transfer Onto Your Credit Card 

There’s some risk that comes with letting someone else transfer their debt onto your credit card. As such, consider some alternatives before you make your decision about which way to go:

  • Lend the other person money. Rather than allowing another person to transfer their balance onto your credit card, consider loaning them money instead. Keep in mind that you will be entrusting them to repay the money you’ve loaned out. If you feel comfortable doing so, you may want to draft up a contract with the terms of the loans, including any applicable interest rate you may want to charge and when you expect the funds to be paid back. 
  • Advise the other person to speak with a financial expert. Financial advisors can help consumers get a handle on their finances and help them come up with a budget that will help them steadily pay down their debts in an effective and efficient manner. 

Final Thoughts

You may want to lend a helping hand to someone you know who’s struggling with high-interest debt by letting them transfer their balance over to your credit card. While your credit card issuer may allow it, there are also some risks that may come with it. Be sure to weigh the risks against the pros before agreeing to this arrangement, and have an in-depth discussion with the other person to make sure they’re on board in terms of keeping up with their responsibilities.

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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