Daughter racks up debt on deceased dad's card

To Her Credit columnist Sally Herigstad
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 wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Dear To Her Credit,
I was an authorized user on my father's credit card. I didn't realize I was only an authorized user, and have continued to use the card and make all timely payments, above the minimum since he passed away. The balance is about $10,500, most of which is from after his death.

I contacted the company because I wanted to pay the card online, and they said my father had to talk to them. I said he passed away. They said someone would get back to me. I called again, and they said no one could take my call in the deceased card unit, and someone would call me back. It has been a month since that call.

Yesterday, I received a call from them and they were not friendly. They said they had closed the account and that I have to sign something and pay for the account with the same interest rate and payment terms as my father had. I truly didn't understand the difference between authorized user and joint account -- as I thought it was my account also -- or I wouldn't have continued using it.

My question is this: Can they sign this debt over to me with the same rates and terms as the original card? They told me they won't be checking my credit and that it won't be a credit account, so I'm curious as to how this works and whether I should sign the documents they are sending me. I absolutely have every intention of paying off the account. I just want to make sure that they are doing this correctly.  -- Carol


Dear Carol,
I can imagine they were not friendly. They discovered you used an invalid card to charge $10,000, and they don't even have a signed contract with you.

When the sole account owner of a credit card dies, the card account is technically closed. The deceased person's estate should pay off any debt associated with the card. If there's not enough money to pay off all the debts, the debts are paid in order of precedence according to law.

I'm not trying to make things worse, but people have been charged with a crime for using a card after someone died. If all the bank is asking is for you to take responsibility for the debt, which you seem willing to do, that's not the worst possible scenario.

In your defense, credit card companies do not make it very clear who the primary and authorized users are on credit cards. I have a card I thought was a joint account, but I found out when I tried to call  that I'm only an authorized user. Short of finding some original paperwork somewhere (and who has that?) or pulling my credit report, I don't know how I could have easily known.

While the debt you owe the credit card company is not an open credit card account anymore, it is still a debt. The bank has a right to charge interest on it, regardless of whether the card isn't active. Let's hope they give you a decent interest rate. You're not in the best position to bargain at this point.

Your best bet is to pay this debt off immediately or at least as quickly as you can -- even if you have to sell or return something or work extra hours. You made an honest mistake, but it was a mistake. If the bank goes from "not friendly" to worse and threatens legal action, you should hire an attorney immediately.

Besides dealing with this debt, you need to start building credit of your own. To do that, you don't need to go into debt. Just open an account, with a secured card if necessary. Buy a tank of gas or something once in a while and pay it off immediately. Soon you will have a good credit history of your own.

See related: Who's liable for charges on deceased Dad's credit card? 

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Updated: 03-26-2019