Paying deceased's bill doesn't imply liability for authorized user
By Elaine Pofeldt | Published: March 7, 2016
Your Business Credit
Dear Your Business Credit,
Mom had a business card, and I was an authorized user. I made the payments on the card and never missed a payment in five years. She died and they closed the account [for future charges], and I still made payments. They won't give me an account. Am I liable for any more payments? -- Carleton
It's not clear from the information you shared, but this is a case where doing a little legwork will go a long way. To find out what your options are, I spoke with a couple of attorneys.
In general, authorized users are not liable for the debt on the primary cardholder's account. However, it's possible you are not actually an authorized user, but a joint account holder. If you are the latter, you would have had to sign the credit card agreement.
Can't remember for sure whether you signed anything? Your first step should be to pull your credit reports to find out for sure. You can get a free copy of each of your reports from the big three credit reporting agencies -- Equifax, Experian and TransUnion -- at AnnualCreditReport.com. The account should be listed on at least one of those reports and will say whether you are an authorized user or joint account holder. If you are a joint account holder, you are liable for any debt incurred on the account.
Authorized users are not responsible for the debt, except in some cases where a survivor may be liable for their deceased spouse's debt if they live in a community property state.
In any case, making past payments on the card in itself does not make you liable, says attorney Steven Weiss, of Shatz, Schwartz and Fentin PC in Springfield, Massachusetts, who specializes in commercial and consumer bankruptcy. "He may have been making the payments for a number of reasons," says Weiss. "The mere fact that he made payments on the card doesn't make him liable."
Even if you are not legally responsible for more payments, if you made charges that contributed to the balance on the card, you have a responsibility to pay them. When cardholders charge purchases on a credit card, the issuer is lending money on the promise that it will be repaid.
You didn't mention how much you owe. If the balance on the card is substantial and you are having difficulty continuing to pay it, I would strongly suggest consulting with an attorney in your state who has experience in debt-related cases.
As for the credit card issuers being unwilling to give you a card, I'd recommend applying for a card elsewhere, assuming you have good credit. Why work with a company that doesn't want your business? There are plenty of other options.
If your credit is damaged, then I'd suggest using the next six months as an opportunity to repair it and then applying for another card. (One article that may help is "Rebuilding bad credit in 5 really slow steps.") You could also apply for a secured card, aimed at people with damaged credit, now. Secured cards require a deposit upfront, which the card issuer will tap if you are late on payments. You can compare different secured cards on this site.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
- How high of a fee do businesses pay to accept cards? – Credit card companies charge fees to businesses when they allow credit card transactions, but certain processors may tack on additional fees which could hurt the bottom line ...
- Funding a small business with credit cards – Be cautious and know whether you are personally responsible ...
- When is it OK to add a surcharge? – Small-business owners may be tempted to pass on hefty credit card fees to customers, but that approach may discourage loyaltyy ...