Using a deceased person’s credit card is generally illegal, but the rules around it are complex. This article will examine whether you can use a deceased person’s credit card, the legal and ethical implications, and steps for canceling cards and managing debt after someone dies.
Quick Answers
Here are quick answers to some common questions about using a deceased person’s credit card:
- It is illegal in most cases to use a deceased person’s credit card if you are not the account holder.
- The deceased person’s estate is responsible for any remaining credit card debt.
- Notify credit card companies immediately when someone dies to cancel cards and prevent fraudulent charges.
- Creditors may allow a surviving authorized user to pay off the balance over time.
- Identity theft and credit card fraud penalties can include fines and jail time.
Can You Legally Use a Deceased Person’s Credit Card?
In most cases, it is illegal to use a deceased person’s credit card if you are not the account holder. The terms of most credit card agreements end when the primary account holder dies.
Some exceptions may include:
- A surviving spouse or authorized user who was jointly liable on the account may use the card temporarily to tie up loose ends. However, they should notify the issuer immediately and stop using the card.
- An executor of the estate may use the card temporarily for paying funeral expenses, clearing out a house, etc. However, they should notify the card company promptly.
- A secondary authorized user may use the card for a short time if they were permitted to use it when the primary holder was alive. But this privilege ends at the time of death.
In all cases, the credit card company should be notified as soon as possible after the primary holder dies. Any continued use of the card should only be temporary and for the limited purpose of closing accounts, paying funeral expenses, or clearing out a house.
Identity Theft and Credit Card Fraud Penalties
Using a deceased person’s credit card without authorization is considered identity theft and credit card fraud. This can result in:
- Civil lawsuit from the estate for any unauthorized charges
- Investigation and charges by the credit card company
- Criminal prosecution including fines and possible jail time
- A fraud alert added to your credit history damaging your credit score
The penalties for credit card fraud and identity theft can be severe. It’s not worth the risk of using a deceased person’s card without permission.
Credit Card Debt of the Deceased
Any credit card debt belonging to someone who has died is owed by their estate. The estate repays those debts from assets left behind by the deceased person.
If the estate does not have enough assets to cover all debts, creditors generally write off the remaining balances. Family members and authorized users are not responsible for the deceased person’s debts unless they co-signed or jointly held the accounts.
Steps for Managing Credit Card Debt
Here are some steps for managing credit card debt after someone dies:
- Notify credit card companies immediately. Ask for a final statement showing the balance owed.
- Check for credit life insurance or other benefits that may help pay the balance.
- Prioritize paying off essential daily use accounts first like gas and groceries.
- Liquidate assets like bank accounts, investments, or property to repay balances.
- Negotiate payment plans with creditors for any remaining debt.
- Consult an estate planning attorney for help managing complex debt.
While this process can be challenging, it’s important to responsibly handle outstanding debts. Ignoring or improperly using credit cards could create legal issues.
Canceling a Deceased Person’s Credit Cards
Canceling credit cards and closing accounts after someone dies is critical. This helps prevent identity theft and stops fees or interest from accumulating.
How to Cancel Credit Cards
Here are the key steps for canceling a card and closing an account when someone dies:
- Act promptly. Notify issuers as soon as possible after the death.
- Request a death certificate. Issuers usually require a copy of the death certificate as proof before closing an account.
- Cut up cards. Destroy any physical credit cards by cutting them up.
- Close authorized user accounts. Cancel cards tied to the deceased as the primary holder.
- Stop automatic payments. Halt any recurring payments tied to the credit card.
- Get a final statement. Ask for a statement showing the outstanding balance.
- Pay the balance. Have the estate repay the remaining balance promptly.
Closing accounts quickly can prevent headaches down the road. Notify every credit card company where the deceased person held an account.
Fraud Prevention
Identity theft is always a risk after someone dies. Here are some tips to help prevent credit card fraud:
- Don’t publish the deceased’s full name and birthday in an obituary.
- Update the SSA, credit bureaus, and DMV about the death.
- File a deceased security alert with credit bureaus.
- Monitor credit reports regularly for any suspicious activity.
- Shred financial documents before tossing them.
Stay vigilant and take steps to minimize fraud. But report any unauthorized activity immediately if it occurs.
Other Options for Managing Credit After Death
Along with promptly closing accounts, here are some other options for managing credit matters after someone dies:
Apply for Probate
Probate is the court-supervised process for administering a deceased person’s estate. The probate court appoints an executor who can legally act on behalf of the estate. Having probate power can make it easier to cancel credit cards, access funds to pay balances, and handle debts.
Notify Credit Reporting Agencies
Contacting credit bureaus (TransUnion, Equifax, Experian) can help prevent identity theft. Alert them to the death, close associated credit reports, and add a deceased security alert. This makes it harder for anyone to open fraudulent accounts.
Use a Credit Lock or Freeze
Placing a credit lock or credit freeze restricts access to the deceased’s credit reports. This blocks any new accounts from being opened, preventing fraud and identity theft.
Consult an Attorney
For complex credit and estate matters, work with an experienced estate planning or credit attorney. They can provide guidance on legal rights, responsibilities, and strategies given the specifics of the situation.
Special Cases for Credit Cards
While the standard guidance is to close accounts after someone dies, there are some exceptions:
Joint Accounts
On a jointly held credit card, the surviving co-owner remains liable for the balance. They retain use of the account but should request a new card be issued in their name only.
Authorized Users
Authorized users on a deceased primary holder’s credit card lose their usage rights at the time of death. Any authorized user cards should be promptly closed.
Co-Signers
If another person co-signed on the deceased’s credit card, they remain responsible for repayment. The account balance should be paid whether by the co-signer or the deceased’s estate.
Outstanding Balances
Any outstanding credit card balances owed by the deceased must be repaid by their estate, probate court order, or debt collectors.
Ethical Considerations
Beyond legal concerns, using a deceased person’s credit card raises ethical issues as well. Even if a relative technically has card access after someone dies, it may still feel morally questionable to charge purchases.
Common ethical concerns include:
- Purchasing items the deceased person would not approve of
- Paying for things not related to closing accounts or funeral expenses
- Putting everyday purchases on the card out of convenience or habit
- Failing to promptly notify the credit card company about the death
To uphold ethics and respect the deceased’s wishes, authorized users should:
- Only make essential purchases related to the person’s death
- Notify companies immediately to close accounts
- Repay any outstanding card balances from the estate
- Destroy or return cards to issuers promptly
Closing Accounts for Lost or Stolen Cards
Similar steps need to be taken if a credit card is lost, stolen or misplaced while the primary owner is still alive. This includes:
- Calling the card issuer right away to report the card missing
- Placing a fraud alert and monitoring your credit reports
- Changing online account passwords if applicable
- Completing any paperwork required to close the account
- Destroying any found or recovered cards and getting replacements
Lost or stolen cards used fraudulently can also incur penalties. But consumers have protections against unauthorized use in many cases when promptly reported.
Alternatives to Closing Accounts
Along with complete closure, some other options exist for managing a deceased person’s credit card:
Remove Authorized Users
Estate executors can request to remove any authorized users without closing the primary account. This can allow paying funeral expenses while restricting new charges.
Freeze Accounts
Issuers may be able to freeze or suspend an account instead of fully closing it. This also restricts access temporarily while sorting out the estate.
Convert to Estate Account
Some issuers can essentially transfer ownership of the deceased’s credit card account to their estate. This allows temporary use for wrapping up affairs only.
Maintain Account
A joint account holder who becomes the sole owner or an authorized user converted to primary status may keep the account open. But new terms may be required.
These options allow some flexibility short-term. But accounts should ultimately be closed or transferred to an heir fully.
Bottom Line
Here are some key takeaways on whether and when you can use a deceased person’s credit card:
- It is illegal to use the card if you are not the account holder except for limited exceptions.
- Notify issuers promptly and destroy cards after someone dies.
- Their estate is liable for any outstanding balances.
- Take steps to prevent identity theft and fraud.
- Consider alternatives like freezing or converting accounts short-term.
- Creditors will typically work with estates on debt repayment.
- Penalties for credit card fraud include fines and potential jail time.
Managing credit after someone dies can be complicated. Consult attorneys and financial advisors for assistance handling debts and closing accounts.
Act ethically, follow card agreement terms, and take preventative measures against fraud. With careful handling, credit accounts can be resolved properly after a death.
References
Here are some resources with additional information on what to do with a deceased person’s credit cards:
- What Happens to Debt When You Die? – Consumer Financial Protection Bureau
- What to Do With Credit Cards When Someone Dies – NerdWallet
- How to Close the Accounts of Deceased Relatives – Experian
- Checklist of Financial Matters When a Loved One Dies – AARP
This guide covers key questions and procedures for handling credit cards after someone dies. Be sure to act promptly, ethically, and consult professionals to avoid complications or penalties.