Most people have at least one credit card, but nobody talks about what happens to them when we pass.
If you want your affairs to be fully in order, then you need to know what will happen to your accounts, your debts, and any rewards you’ve earned. That could make a difficult time smoother for the people you care about.
Here’s what actually happens — and how to plan ahead.
The accounts stay open until the issuer is notified
Credit card companies don’t automatically know when someone dies. Until someone notifies the issuer, the account stays open.
That means:
- Recurring charges can still post
- Payments are still due
- Interest and late fees can accrue
- There’s higher risk of fraud if no one is monitoring the account
To avoid unnecessary charges and problems, notify the credit card issuers as soon as possible.
Authorized users must stop using the card
Additional cardholders are not allowed to keep using the card after the primary cardholder dies. Charges made after the accountholder’s death can be considered fraud.
Sometimes, authorized users are left with no credit cards in their name once the primary cardholder passes away. That can cause even more problems and stress.
It’s best for authorized users to have their own cards or other payment methods. And if the primary cardholder passes away, they should notify the issuers and stop using those cards ASAP.
Outstanding balances are paid out of the estate
Our credit card debt does not vanish when we die — but that doesn’t mean our family members are stuck with it.
When possible, debts are paid from the deceased person’s estate. Then the remaining assets go to their heirs.
Let’s say someone passes away with $300,000 in assets and $10,000 in credit card debt. The estate executor would pay the debt first, and the beneficiaries would get the remaining $290,000.
If the estate can’t cover the debt, then it may go unpaid — though there are some exceptions.
When survivors are responsible for the debt
Other people are not usually responsible for our debts when we pass away.
However, they may be liable if:
- The account was jointly owned
- Someone cosigned the account
- A surviving spouse lives in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, or WI)
Otherwise, heirs are not on the hook for our debts.
What happens to credit card rewards?
When it comes to unused points, miles, or cash back, what happens to them depends on the card issuer.
Credit card rewards may be…
- Forfeit once the account is closed
- Transferred to a surviving spouse or account holder
- Redeemed by an estate trustee
So speak with the card issuer, learn your options, and make sure rewards won’t go to waste.
Tip: It’s generally best to use your rewards instead of stockpiling them. Just like cash, points and miles lose value over time.
Steps you can take now
A little planning can save your loved ones a lot of stress.
Here’s a checklist:
- Keep a list of all your cards and issuers
- Share that list with your estate executor (or at least someone you trust)
- Include instructions for closing your accounts in your estate documents
- Make a note of any rewards and how to handle them
- Make sure authorized users know to stop using the cards immediately
This will help to prevent fraud, overbilling, interest charges and fees, and headaches for your family.
It’s also smart to take a step back and make sure the cards you use today make sense for your lifestyle and spending. You don’t want to leave money on the table for your heirs or yourself. Check out our guide to the best credit cards to find the options that could save you the most.
