What Happens To Credit Card Debt When You Die

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Everyone dreads death, but it can also solve many problems, including bill payments. What about your credit card debt? One thing is for sure: credit card debts do not follow you to your grave. You will have no bills to worry about.

However, your estate assets could be used to settle it. Your co-signer or joint account holder may take over the credit card debts to settle them. Additionally, suppose the credit card debt was accrued when you are married, in most cases. In that case, it becomes the community (the couple’s) responsibility- meaning your spouse may have to deal with your debt.

Let’s dive into the details of what happens to your credit card debt when you die and what survivors can do to handle it properly.

Who Handles the Credit Card Debt When you Die?

When you die, your estate is often distributed to your surviving spouse or heirs; however, this is done after all debts you left behind are paid from the assets. The executor calculates the total of all assets you possess before dying and uses them to clear your credit card debts first. The executor could be someone you appointed in your estate plan or your will, or if you did not appoint one, the probate court would appoint.

What Happens If Your Debts Exceed Your Assets at the Time of Your Death?

In that case, your estate becomes insolvent whether the survivors must pay the credit card debt hinges on several factors.

A joint account holder on your credit cards is deemed responsible for the accrued debt after your death. The term joint account holder means a co-signer or co-borrower. Often the credit card company checks your credit score reports and that of your co-borrower before issuing the card; therefore, the co-signer is equally responsible for the credit card balance.

The situation will be different if you are an authorized credit card user but not the account holder. Though you may make payments and purchases with the card, the primary account holder is solely responsible for clearing the credit card balance. This means you are off the hook from paying the outstanding balance.

The only exemption to this rule is on community property estate, which indicates that spouses are responsible for their partner’s debts. Your partner (spouse) will have to pay your credit card debt upon your death regardless of whether they are an authorized user or not.

Tip: Remember that law on community property differs from one state to the other, so consult a qualified attorney who handles estate laws in your region to determine what your responsibilities are.

What Happens to Credit Card Debt When You Die?

When a loved one dies, it is so easy to overlook some important steps in handling their debts. The responsibility of notifying financial institutions to close the deceased’s credit card accounts is often pushed aside or forgotten. Several things can go wrong if these tasks are not attended to.

For instance, criminals may scroll through online records or obituaries to steal the deceased person’s identity and create new credit card accounts and accumulate more debts. Hackers can also steal from the deceased’s existing accounts. It would be difficult to identify these scrupulous activities if the bank is in the dark about the account holder’s demise.

Follow these six simple steps when the credit card holder dies to avoid unnecessary problems.

1. Put All Financial Documents In Order

If the deceased assigned you as the executor, begin by organizing their financial accounts. The spouse or a court-certified representative can also request the dead person’s credit report to establish all the accounts listed under their name. You may be shocked at some information on a credit card report. It is advisable to regularly check your credit card report before you die and correct any errors.

2. Request For Several Death Certificate Copies

You will undoubtedly need multiple copies of the deceased death certificate to send to life insurance companies and credit card companies. The funeral director handling the cremation or burial of your loved one will help you request death certificates. Remember that printing or requesting these documents comes with a cost per copy depending on each region. Therefore, be ready with the money needed to get the death certificate.

3. Stop Using The Credit Card

If the cardholder dies, their credit cards are invalid. Therefore, they should never be used even for the deceased’s legitimate expenses like funeral expenses.

Perhaps you could reason that you are an authorized credit card user to use the card; however, you relinquish this right once the cardholder is dead. Any further usage of the credit card amounts to credit card fraud, which could land into serious trouble. Many estate lawyers recommend collecting all the credit cards from authorized users and keeping them in a safe or destroying them.

4. Inform The Credit Card Companies Of The Cardholder’s Death

An open credit card continues to accrue interest and finance charges. Therefore, it is essential to inform the credit card companies of the death to close the credit cards immediately.

You should also establish if the credit card accounts have recurring charges such as utility bills or phone bills. Since these bills are automatically charged monthly on the credit card account, cancel these bills or immediately transfer them into another account.

Ensure you contact the credit card companies using certified mail. If you call the company, speak to their representative, inform them of the situation, and request them to flag the account. You could also request an official address to forward the necessary documentation. Ensure you send a copy of the official death certificate to the credit card companies in your initial letter.

5. Contact All Three Credit Bureaus And Request A Credit Freeze

Besides contacting all the deceased’s credit card companies, you will also contact the three credit reporting bureaus- Trans Union, Equifax, and Experian. Why? It is important to request a credit freeze to prevent anybody from opening other accounts or new credit cards in the deceased name.

Additionally, you should send a follow-up mail requesting that your loved one’s credit report be immediately declared deceased. The official phone numbers for these credit bureaus are:

  • TransUnion (800-916-8800)
  • Equifax (888-548-7878)
  • Experian (888-397-3742)

6. Be Informed Of Your Rights Before Paying Debt Collectors

The rules on debt payment after the demise of the cardholder vary from state to state. In some states, you are required to wait for a specific period to pass. You may also be required to post a public notice of death in a circulating newspaper before the executor distributes the money.

Debt collectors can harass you if you do not know your rights. You should know that the federal Fair Debt Collection Practices Act (FDCPA) offers you protection. The act makes it illegal for debt collectors to resort to deceptive, unfair, and abusive practices when demanding payments.

Do not be intimidated by creditors who want to jump ahead to be paid first, especially in cases where the estate is not enough to cater to all debts. Before paying credit companies, ask if they can send proof of claim for the estate.

Beware of aggressive debt collectors who may take advantage of the survivor’s distraught emotions to manipulate them into paying debts they do not owe. Ensure that any payment plan with a debt collector is written and signed by responsible parties.

Final Thoughts – What Happens To Credit Card Debt When You Die?

Credit card debts may not follow you to your grave, but the survivors you live behind may have to deal with your mess. This can be hard for your spouse and children, who may want to inherit a piece of your estate. Therefore, ensure you have a sound credit report and a drawn will to protect your loved ones from financial heartache upon your death.


Q: what happens to your credit score when you die
A: When a person dies, their credit score no longer has any impact on their financial situation. Credit scores are tied to an individual’s credit history and financial activity. Since a deceased person is no longer engaging in financial transactions or using credit, their credit score becomes irrelevant.

It’s important to note that credit scores are not transferred or inherited by family members or beneficiaries. Each person has their own individual credit score based on their credit history and financial behavior. Therefore, the death of an individual does not directly affect the credit scores of their surviving family members.

Q: What is the probate process?

A: Probate is the legal process of distributing a deceased person’s assets and settling their debts. It involves validating the will, identifying and appraising assets, paying off debts, and distributing the remaining assets to the beneficiaries or heirs.

Q: Who is responsible for paying off the credit card debt in probate?

A: In most cases, the responsibility for paying off credit card debt lies with the deceased person’s estate. The executor or administrator of the estate, appointed by the court, is responsible for managing the probate process, including settling the debts.

Q: Can credit card companies collect the debt from the deceased person’s family members?

A: Generally, family members are not personally responsible for the credit card debt of a deceased relative unless they were a joint account holder or co-signed for the debt. However, it’s essential to note that laws regarding debt liability may vary depending on the jurisdiction.

Q: What happens if the deceased person’s estate does not have enough assets to cover the credit card debt?

A: If the estate lacks sufficient assets to pay off all the debts, including credit card debt, it is considered insolvent. In such cases, the debts are typically prioritized and paid off according to a predetermined order set by the probate laws of the specific jurisdiction.

Q: Can credit card companies still try to collect the debt from the deceased person’s estate?

A: Yes, credit card companies can make a claim against the deceased person’s estate to recover the outstanding debt. They may submit a claim during the probate process, and if approved by the court, they will receive a portion of the available funds from the estate.

Q: What happens if a deceased person’s credit card debt is not paid off in probate?

A: If the credit card debt remains unpaid after the assets of the estate are exhausted, the debt generally cannot be passed on to the deceased person’s surviving family members. The credit card company may have to absorb the loss, although it is advisable to consult with a legal professional for specific guidance.

Q: Can life insurance policies be used to pay off credit card debt after death?

A: Life insurance policies are typically paid out directly to the designated beneficiaries and are not subject to probate. If the deceased person had a life insurance policy with a designated beneficiary, the funds from the policy can be used to pay off credit card debt, depending on the terms of the policy.

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I am full-time financial writer working with various institutions around the globe. With years of experience writing editorial pieces for Business Daily, a publication of Nation Media Group Kenya, I deliver insightful pieces for start-ups and established businesses. I have a degree in commerce and accounting from Kenyatta University, with decades of experience in writing educative and unbiased articles on finance, business, and health. I am currently living in Nairobi, Kenya with my wife and baby girl.

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