She took cash advances on his card, then he died. Does she owe?
To Her Credit
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Steward Radio and other programs. See her website SallyHerigstad.com
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Dear To Her Credit,
I was an authorized user on a credit card. The primary
cardholder called and had a card put in my name attached to his card. He was in
his right mind and made his own decisions. While he was alive, I transferred
money from the credit card to my account.
The credit card is now paid off, and the primary cardholder
The family members of the deceased are starting to check
past credit card statements. They will see where I made purchases on the card.
Although it's paid off, will the family try and sue me for charges I made and
try to get me to pay back the money? I'm worried. -- Kim
Legally, it doesn't sound like you did anything wrong. This
cardholder, presumably a close friend of yours, authorized you to use his
credit card. This included the right to take cash advances on the account. The
family may not like the fact that you took cash in that manner, but they can't
do much about it.
As an authorized user, you would not be responsible for the
balance on the accounts, even if they were not paid off. In ordinary
circumstances, you cannot be forced to reimburse the estate or other family
members who paid off the card.
Legal liability and the dictates of your conscience can often
be two different things, however. The fact that you are worried about the
advances makes me wonder about a few things. Did you take cash advances of $100
-- or was it more like $10,000? Could the cardholder afford such cash advances?
How large are your total cash advances in relation to the rest of the deceased
If your cash advances were substantial, you could hardly
blame family members if they wonder where large cash advances on the deceased
person's credit card account were going. Assuming he was in sound mind, as you
say, they can't get the money back from you, any more than they can undo other
purchases and gifts the deceased person made before he died. That doesn't mean
they can't confront you, though.
If you're not completely comfortable with the cash transfers
you made, and it sounds like you are not, you have a few options.
You can do nothing and hope for the best. The family members
may not notice the advances if they are relatively small, or they may decide
not to ask you about them. The problem with this approach is that it doesn't
give you any closure. In addition to your grief at losing your friend, you are
living in suspense, wondering if and when a family member may call. I don't
recommend this option.
The second option would be to contact the family and explain
the situation. This could be by phone or by letter. Express your condolences
and briefly explain that your friend added you as an authorized user and why.
For example, if you were sick or unemployed when your friend offered to let you
take cash advances, the family is more likely to be understanding than if they
are left to imagine you took the money to go out on the town.
Depending on your financial circumstances and those of the
family, you may choose a third option. You may choose to repay part or all of
the cash advances of your own free will. If the deceased person has dependents,
or if you know that the family members had to dig into their own pockets to pay
final expenses, you may especially favor this option. If your circumstances
have improved since your friend let you use his card -- for example, if you're
back on your feet with a new job -- paying money back can help you feel good
about helping the family and honoring the memory of the friend you lost.
See related: When a cardholder dies in debt, authorized users are not liable
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Published: January 3, 2014