I have a moral dilemma. My sister is asking me to take a cash advance from my credit card so she can use that as a deposit on a house. She says she will pay me back in 2-4 weeks from her upcoming paychecks. I feel very uncomfortable doing this, but I also feel guilty saying no. I don't want to use my credit card at all and I do not have the cash. I spent the last couple years working very hard and sacrificing my lifestyle to pay off my card and this month I finally have paid the balance in full. She knows I have the space on my credit card and is asking to loan 3-5k as a cash advance from the card. I have been waiting so long to see the balance say zero, and this month the time has finally come. It makes me anxious to imagine piling debt back onto it, even if it is a short amount of time.
What is the morally right thing to do? Am I being too uptight to not use my credit card when I have the room since it's "only for a couple of weeks"?
I already told her I didn't want to, but she has still asked again. I worry she will hold it against me if I say no and it will damage the relationship. Her cash flow is very tight right now because she overspent on her current house, so she is looking to downsize and wanting the loan to do it as soon as possible. Her income is high, much higher than mine, and I do believe she would ultimately pay me back.. but I don't want to carry the mental load and credit hit, especially if the timeline ends up being longer than she expects.
Using a credit card to loan family member money
byu/kiiiwiii inpersonalfinance
Posted by kiiiwiii
49 Comments
You loan money with cash/savings. You don’t loan money on credit cards. If you can’t afford to loan the money without a credit card you can’t afford the loan and you can tell them that.
Tell her to take out a pay day loan if she makes so much money or she can use her own credit card. I would never do this for family. I’d give them a place to live and save money rent free but never this.
“Here’s money I don’t have to give to give to you person who doesn’t have it to pay it back.”
When i put it like that you see the answer?
You are under no obligation to go into high interest credit card debt just for your sister, she is being irresponsible in asking you in the first place
If she’ll have the money you are being asked to loan her in 2-4 weeks, then she should do her house purchase without that bit as a down-payment and then just contribute the extra bit when she has it.
If $3-5k is the difference between her getting the house and not, then it sounds like she can’t afford a house anyways.
>I have a moral dilemma.
You do not. You have a sibling trying to take advantage of you.
There’s no moral issue saying “sorry, but I can’t afford to do this right now.”
Horrible idea. Also, pretty sure mortgage companies are going to check her finances to see that she has the money to support the house. I loan from you might be a problem for her. Credit card rates are insane, bad idea. Just my opinion.
if 2-4 weeks pay is the difference between buying a house and not, she can not afford a house.
if she pays debts back reliably, she could use her OWN bank to get the cash she needs. so why does she want it from yours?
risking your credit so she can buy something she cant afford is enabling, not helping. say no, and then say you dont want to talk about it anymore.
Don’t do it.
Mortgage lenders are careful about the source of downpayment funds, and so may come back to you to sign a paper asserting that the money you fronted her for the downpayment was a ***gift***, not a loan.
Because mortgage lenders want the downpayment to come from funds on hand, ***not*** from a secondary loan, because that would change the borrower’s debt-to-income ratio.
If you don’t have actual cash to give, absolutely do not use your credit to get cash for someone else. No guilt necessary. You don’t have the money and cash advance on CC is the highest interest rate of all. Hard NO.
No. Just No.
not only should you never do this – but the money you give her will not be accepted by the bank as an acceptable source of funds for a downpayment. They will need proof of where it came from – and a gift letter from you, that will require you to sign something saying that you are not going to be getting the money returned to you. This would be fraud – and would give your sister a document that you signed saying you dont want the money back.
no. No no no no, fuck no if you have to.
The word NO is a complete sentence. You don’t need to explain further.
As they say, don’t loan anything that you aren’t prepared to consider a “gift”. Can she sell anything to help generate some cash to at least make that amount smaller? She also needs to understand that any additional fees/interest need to be paid back as well.
Agree though, this is a tough spot to be in. I’ve protected my credit religiously (score is 840) and have zero debt. I’d be really uncomfortable doing this for my sister too even though I love and trust her…
She needs to wait 2-4 weeks to just save her own deposit. Also she could rent or sell her current home she already has.
This is weird.
The morally right thing to do is to say “No.”
If you feel you need to say more, say “No, I can’t afford to do that.”
This is not a moral question. You do not have the money to loan. You cannot afford the exorbitant immediate interest on a cash advance. You cannot afford not to be paid back on schedule or at all. If your sister will have her money in 2-4 weeks, she can pay the deposit then without the interest and without you taking the risk. Someone who this desperate is unlikely to be good for the money. If she had a good enough record that you trusted her, you wouldn’t be here asking the question.
This is a HARD no.
If she wants to do this, she can take out her own credit card. And, if the relationship is damaged she is the one damaging it… not you.
Friends and family members don’t make asks like this.
Anyone that is asking you to do that doesn’t know enough about buying a house or have financial responsibility required. They will not have the money to give you in a few weeks.
Do not do this.
If she can’t afford the deposit, she can’t afford a house. Unless she’s going to become literally homeless, that’s not your problem.
Your sister sucks. The moral thing is for her to never have asked for such a stupid and damaging favor.
You can buy a house with no down payment. You can wait to buy a house. You cannot take a CC cash advance, with the automatic extra fees, plus the inevitable very high interest, to fund part of a house purchase. It’s asinine.
Do not take out the cash advance. Also how does she know what’s on your card???
No. Also, sorry, your sister isn’t going to pay you back.
Again, no.
Aint no way I would do that, ever. For anyone. Including myself, never mind anyone else. Too risky.
Not a chance this is a crazy ask.
Most banks frown on borrowing money to borrow money.
There’s no moral dilemma here, only a sibling trying to make you make a terrible decision.
Absolutely Not
If she can’t qualify on her own then she’s not going to be able to maintain that house and unsecured credit card debt in your name is going to land on you.
I can tell you from personal experience that buying a house always means unexpected expenses and she’s got to be prepared for them. don’t ever lend money on your credit card, borrow loan, borrow money on your credit card for someone else. let them get their own credit card
Newsflash: If she had a credit card of her own she would could do the same thing and it’d be on her fact that she doesn’t have that credit card means a she’s extremely smart and she
A few things:
1. Never loan anybody money that you don’t have or can’t afford to lose.
2. If your sister cannot buy this house without a loan from you for the down payment, then she cannot afford this house. Even if you had money to lend, you shouldn’t enable her to make bad decisions. She should have her earnest money and the balance of her down payment money in the bank before even looking at homes. She should only buy a house when her own finances are in order.
3. Mortgage companies want to know where the money people are using for the down payment comes from. If she cannot show that her down payment money has been in her bank account, she will need to show proof of the money’s source and that it is NOT a loan. Otherwise, they will not underwrite her mortgage.
If this is the US, and she needs a mortgage for the house she is buying, the bank will need to account for where she gets extra funds from. The more precarious her financial situation, the closer they will look into it.
No way they’ll approve a mortgage if she needs to get a cash advance from a sibling’s credit card when she’s already cashflow constrained. Absolutely no way.
She could try to claim she had the money sitting in cash, maybe? You’d then be party to fraud, though. Don’t do fraud, kids.
If she has a current house, and has equity in it, she should be able to structure a loan to rely on her equity.
Stepping back from what a disastrous idea it would be on her end though, you owe it to yourself to be fully financially stable before you even consider loaning anyone money. To be fully financially stable, you should be spending less than you make [check], have no high interest debt [check], and have 3-6 months in cash in a high yield savings account as an emergency fund [sounds like not yet].
You’ve made great progress, and you should be proud! But you’re not yet in a place to loan money unless her life is in immediate danger and this money can resolve that.
Good luck!
Please stop talking about money with her. She took your accomplishment and leveraged the knowledge for her own gain. If she needs debt to get a house, it needs to be her debt. This is not a you problem. You don’t have the money.
A fool and their money are soon parted. If she could afford this in 2-4 paychecks then she doesn’t need a drastic off the books loan in your name, with high interest, where you carry the risk.
This is not a moral dilemma. Never lend money to anyone that you aren’t prepared to lose.
She can’t afford the move and you can’t afford the loan.
This sounds like mortgage fraud. If they knew she owed on her dp they may not want her as a borrower.
Do not do this under any circumstances. First she would need a letter saying this is a gift, and you would be harmed. You don’t have the money. This is not good for you in any sense.
No. Don’t do it. No way this ends well. And it sets a precedent so you will be repeatedly asked for money.
Never take a cash advance out on your credit card.
It accrues daily interest and even when you pay it doesn’t apply until you’ve paid your balance in full and then it still has interest that accrued for an additional month.
Experience: worked for Chase cc customer service for 5 yrs
Do not set yourself on fire to keep someone else warm. Really bad idea. If she would be able to pay you back in 2-4 weeks, she should just wait and save the money herself.
Why doesn’t she do it for herself? Her credit is likely bad why?
She doesn’t pay people other bills. Anything you give her expect to never get it back.
If you “loan” her the money be prepared to not see it returned. I had a sister that needed money, and called me up crying because she was going to go to jail. She convinced me to take a cash advance from a credit card, and I would be paid back in three months. It is four years later and I am still waiting for my money.
Repeat after me: My available credit is not part of my net worth. The tell your sister that. You do not have any money to lend her. You have zero money.
Also, family members seldom pay back loans. The closer the family, the less likely that chance comes, with siblings being essentially zero chance.
I would never pull a cash advance for myself, why would I pull it for someone else? You need to be your own advocate. No one else will.
If you do not have the money, the answer is NO. Never loan money to someone unless you’re okay without it. She can’t afford it. Neither can you. The answer is no. You’ll be paying interest on a credit card, probably 20% or more just to fund someone else’s life. Absolutely not. If this is enough to damage her relationship with you then she needs to get her priorities straight.
Asking for someone to take out a credit card cash advance for a deposit on a house? This is not a life threatening emergency.
Would she be paying all the fees and interest as well??
I personally would not do that. If she doesn’t pay you back, now you’re paying with a high interest.
She can’t afford the deposit. When she gets into the house, she won’t be able to afford more things. Will she pay you back? Will she ask again for money?
This is not an emergent situation.
Don’t do it. I used to lend my siblings money all the time, as A) I can afford it, B) I confirm repayment terms up front and C) it’s for emergencies only…nothing structural.
I would neve put myself in debt, just to allow them to be debt free.
DO NOT DO THIS. She will not be able to pay you back and you will be stuck with a massive balance racking up interest.
Just say no.
Why can’t she do this on her own credit cards? Is it because she’s bad with money and has poor credit?
You already know the answer, but family makes the hard decision harder.
Omg is she crazy? OP, please don’t do it. You already know it is a wrong thing. Sounds like she cannot afford this house to begin with lol sure she will pay you back in 2-4 weeks lol yeah no, please say absolutely no to this.