WHAT HAPPENS TO THE CREDIT CARDS AFTER DEATH
Death. The great leveller that we don’t like to think about. As Woody Allen once said, “I don’t mind dying, I just don’t want to be there when it happens”. However, many a memory of a departed relative has been sullied after death by complications with financial matters, and credit cards are no different.
So, what happens to credit cards after a death? If they’re the kind of person that pays their card balances off every month, then there’s no problem at all with what happens to money that’s owed. Just make sure the company is added to the long list of people who need to be informed, and they will most certainly deal with things tactfully and sensitively.
If there’s a balance left over, and worse still, if there’s a substantial balance, then things do tend to get a little bit more complicated.
Essentially what happens is this: The debt on the card is the card holder’s alone, and when they dies it becomes the responsibility of the executors of the deceased’s estate. If there are several debts, the whole issue will have to go through a probate process in which assets and debts are weighed up and paid in order of importance. And even then, that also depends on the deceased’s will.
So, what do you do if you’ve landed this unpleasant task? First, make sure that the bank is told and are given a certified copy of the death certificate. Get the bills together, and talk to the company about options for paying off the debt. Sometimes, they’ll let the executor take over the account. For smaller debts, it’s not unknown for banks to write it off as a goodwill gesture.
If there isn’t enough money to pay off the credit debt, then the companies can’t chase family members to pay it off. However, there have been reports – particularly in the US – of banks attempting to bully bereaved families for credit card debt when the debt has heavily outweighed remaining assets.
Our advice on this is simple. Keep your debts as low as possible if you can. And always plan for the worst case scenario, and that might mean taking out a life insurance policy that means everything is covered in case of your demise.
But hey – that’s years away! Get out there, stop worrying and enjoy life with the right rewards credit card
Article by Jason Taylor – [email protected]