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Authorized users can sometimes gain late cardholder's rewards

Officially, death of primary cardholder usually ends access, but ...

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Cashing In
Cashing In columnist Tony Mecia
Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. He writes "Cashing In," a weekly column about credit card rewards programs, for CreditCards.com

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Question Dear Cashing In,
If the primary cardholder passes away, can the secondary cardholder still use the points? -- Donna

Answer Dear Donna,
Your question can be broken down into two distinct questions: What is the role of secondary cardholders (also known as "authorized users") in accumulating and using rewards? And what happens to reward points when you die?

Being an authorized user on someone else's credit card can make sense under the right circumstances. Often, parents will add a college-age son or daughter as an authorized user to help them build credit. Or a cardholder might add a spouse as an authorized user to help keep finances tidied up in a single account.

Sometimes, reward cards offer you points for adding an authorized user, in the hope that will translate to more spending -- and therefore more money for the issuing bank. The bonus points tend to be meager, usually 5,000 or fewer.

If you're an authorized user, you have all the same charging rights as the primary cardholder, but with none of the responsibilities of actually paying the bills. That can be a good deal -- assuming the person who is paying the bills pays them on time.

When it comes to rewards, authorized users have no special claim to points or miles. Since the account is not theirs, they do not have the rewards. All they have is a card with charging privileges, with the bill sent to the primary cardholder. In some programs, that primary cardholder can allow an authorized user to have access to the points, but it is not automatic.

So what happens when the primary cardholder passes away? Those policies vary, and they are spelled out in pretty much all the fine print of these programs. A couple years ago, The Points Guy blog did a comprehensive roundup of these policies. Generally, frequent flier programs tended to be restrictive about transferring miles after death, while hotels and credit card reward programs tended to be more flexible. 

However, as is the case with many policies related to credit card rewards, the details in the fine print do not always reflect on what happens in real life. The New York Times reported in 2012 that the formal policies on transferring a deceased's miles differ from actual practice. Customer service representatives might have some compassion in these situations, especially with programs that allow you to easily transfer points to other people.

The bottom line, Donna, is that the answer to whether an authorized user can use rewards points is going to depend on a number of factors: What is the reward program's policy on points of people who have died? Does the program allow primary cardholders to grant authorized users access to rewards, and has this permission been granted? Is the program willing to bend the formal rules? And who is the authorized user -- if it's a surviving spouse, the odds might be better than if it's a faraway cousin.

I would start by going to the terms and conditions of the rewards program to see what the policy is supposed to be. But keep in mind that your experience could wind up being better than what the policy says.

Good luck to you.

See related: Can you claim frequent flier miles after death of a parent?, Bequeathing frequent flier miles in your will

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Published: March 31, 2015


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