Tender, Loving Credit

by Martha Baer

Recently, while pursuing my unscientific study of relationships for this column, I came across a hapless pushover in his 40s whom I’ll call Hank. Hank had a bad habit of making loans to his girlfriends. “So, now,” he says with a weirdly amused sense of persecution, “all my exes owe me money!” He broods over the ethics. “If I broke up with them, do they still owe me? What if they broke up with me?!”

The lost dough would be bad enough, but Hank has discovered that the loans also have made him the butt of a good deal of bitchiness. The exes, it turns out, have a vested interest in being difficult, sometimes even in revising history so that it was Hank who precipitated the break-up, even when it was not, and then punishing him for it. They figure no guy wants to keep bugging an ex who hates him, for cash she doesn’t have. As Hank puts it: “Lending to girlfriends gives them a financial incentive to be bitter and find fault with you.”

Hank’s main problem, of course, is masochism, but he also suffers from a more common disease that frequently accompanies lending money to lovers, friends, or family members: resentment. Personal loans—whether brother lends to sister, a girl to her guy, or stepdad to stepson—come laden with psychology that can be hellish. And when a spouse is involved, it can get worse. Since Hank has finally married, he moans, “Now all my exes owe us!”

The trouble is that these loans start out with lots of heartwarming feeling. Tales of goodwill with unforeseen emotional consequences abound. There’s Blair E., who was moved to help his out-of-work friend save the farm (literally, a farm) and ended up sinking $9,200 into the property. Blair hasn’t seen a penny of it, and though he insists the friendship hasn’t suffered, neither man has mentioned the loan in two years. “I shouldn’t feel guilty about bringing it up,” says Blair, “but I do. I have more net worth than him.”

A successful brother funnels cash to his downtrodden twin, as his wife laments having married the two of them. A mother has to sneak funds to her son for a car because her second husband, his stepfather, has forbidden her to “spoil” the boy. Indeed, roughly eight million households in the United States, according to numbers derived from a Federal Reserve survey, have loans of between $400 and $500,000 outstanding to friends, relatives, and business associates. That’s about $89 billion in jeopardized love and loyalty spread out across the country. And the reality that this happy sharing frequently turns rotten isn’t new. It was as far back as 1600 that Shakespeare wrote his famous warning to the likes of Blair and Hank in Hamlet, Act I: “Neither a borrower nor a lender be;/ For loan oft loses both itself and friend.”