When someone passes away, there are many things that must be resolved, including finances. If your loved one had credit cards in life, those credit cards will need to be canceled once they pass away. This is not something that automatically happens once someone dies, but it is an important task to complete.
Even after you’ve taken the steps to freeze your loved one’s credit report, you should contact individual credit issuers to cancel their credit cards. This process is generally easy and straightforward.
Try to get organized beforehand with names of accounts and passwords. You can request a credit report for a comprehensive view of which accounts need to be settled. It may also be helpful to monitor the mail for incoming statements and check for old invoices or statements.
Once you’ve gathered information about the accounts that need to be canceled, here’s what you can do next.
Determine if others are named on the account
Before you contact a credit issuer to cancel an account, it’s important to determine if the account is a joint account or if it has authorized users.
In the case of a joint account, the account is equally shared between the deceased and another person. It’s a good idea to notify the co-owner of the account to let them know that they will be solely responsible for the account now. The co-owner can contact the card issuer to find out what that means for them. This is true for bank accounts, as well.
In the case of authorized users, there are no shared responsibilities on the credit account. The deceased, as primary account holder, is responsible for all payments. This means you can move forward with canceling the card completely. However, it’s helpful to notify users that you’ll be canceling the account, as they will no longer be able to use their card after you do so.
Notify the issuer
Once you know whether the deceased shared the account with anyone, it’s time to notify the issuer. In the case of a joint account, you, or the joint account holder, will simply need to remove the deceased’s name from the account.
For all other cases, you will need to cancel the account. It’s important to do this as quickly as possible to avoid any possible fees or accrued interest on the accounts.
Call each card issuer and ask to speak with “Deceased Account Services” or the “Estate Unit”. Many card issuers have dedicated lines for this that you can find on their websites. When you notify the issuer, be prepared to present an original copy of the death certificate and any important court documents pertaining to the estate. Not all issuers request this information, but many do, so it’s helpful to have access if necessary.
Resolve the account balance
If the deceased had a balance on their credit card, it will need to be resolved through their estate by the executor of the estate. This will be a part of the probate process.
At no point should you pay a creditor using your personal funds. Instead, the creditor should petition the estate for the remaining balance on the account. If there aren’t enough assets in the estate to cover the debt, creditors may be out of luck. This is because credit card debt is unsecured debt.
Family members aren’t responsible for a loved one’s credit card debt, except in the case of a joint account. Authorized users are also generally not responsible for paying balances.
Debt collectors and creditors can contact relatives about paying debt but can’t use deceptive or abusive tactics to try to enforce payment due to the Fair Debt Collection Practices Act. This act applies whether you are responsible for the debt or not. Aside from protecting you from potential harassment, it allows you to decide when and how you would like to be contacted if necessary. It also gives you the ability to defer communication to a lawyer if you choose to employ one.
Check for rewards redemptions
If the deceased has any rewards left on their credit accounts, you may be able to redeem them as an authorized representative of the estate. In order to redeem rewards, the authorized person will have to put in a request with the issuer and make sure that the account balance is paid in full. Many issuers have a timeframe for paying off the balance, so make sure you check this detail. Rewards will be issued in the name of the deceased and sent to the address they have on file.
Cancel recurring payments
If the deceased used their credit card to make recurring payments on any other accounts, such as utility bills or other subscriptions, you will need to cancel those. Canceling the credit card is not enough to stop these payments from being processed. Check any statements your loved one left behind for recurring bills, including cell phone service, internet service and cable. Any services that have automatic payment with a credit card will need to be canceled with the service provider.
Dispose of the card
Once the card account has been canceled, it’s important to destroy the physical card. Also try to gather and destroy any cards from authorized users.
The best way to dispose of any cards is to run them through a shredder or cut them into pieces so that the magnetic strip and EMV chip isn’t viable and the personal information isn’t readable.
Also check to see if anyone has access to any credit account numbers and inform them that the accounts are no longer valid.
Lastly, destroy any remaining card statements that are more than 60 days old. However, if any of the credit accounts were used to make tax deductible purchases, hold on to those statements from the past six years. You will probably need them to help complete any final tax returns.
Dangers of using a deceased person’s credit card
Once a person has passed away, their accounts are no longer valid. Unless you are the co-owner of a joint account, you shouldn’t use a deceased person’s credit card. This is true even for expenses pertaining to the deceased. Using a deceased person’s credit card is fraud, even if you were an authorized user, and keeping the accounts open could open the door for identity theft or fraud.
Using a deceased person’s credit card also could make you liable for new and old debt on the card. Once a person has passed away, their accounts should be closed and their cards destroyed.
Joint credit card accounts
When the co-owner of a joint account dies, the account can be taken over by the remaining owner. The co-owner’s name will need to be removed from the account, so that sole responsibility for the account will fall on the remaining owner.
Joint accounts are different from authorized user accounts. Both parties are responsible for the debt on a joint account, while an authorized user is not a primary cardholder and holds no responsibility for any debt accumulated on the account.
If you and a relative have a joint account and your relative passes away, you can take over the account. However, if you are an authorized user on your relative’s account and their account is canceled after death, you lose access to the account.