Is daughter liable for shared card debt with mom?

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Question for the expert Dear Opening Credits,
My ex-wife put my daughter on several of her credit cards to help her start her credit. My ex-wife has since passed away. Is my daughter responsible for all the debt on these cards, even on ones where she did not activate her card?  -- David 

Answer for the expert Dear David,
The answer you're hoping for is here: Your daughter is probably not on the hook for any money owed to the credit cards in question. 

Because you wrote that your former spouse "put" the child on the cards, that's a strong indication that the accounts are not and never were in your daughter's name at all. Rather, it sounds to me that your ex-wife made her an authorized user. If that's the case, your daughter can relax. The issuers (or collection agencies, if the debts were charged off and sent to collections) won't be able to come after her for payment. Well, they can ask, but she's not required to pay.

Many credit issuers allow account owners to give selected people legal access to use their personal credit line. With a phone call, they can instruct the credit card company to send a card to whomever they want. Those cardholders will then be classified as authorized users. The plastic will bear their name and they may swipe it at will. Information about the account will show up on all the cardholders' credit reports, too. So if your daughter was an authorized user, and the accounts were all kept in good standing, they would have helped her establish her own credit history.

More good news: Authorized users may have an obligation to pay for what they spent, but that would be an arrangement made between cardholder and the account owner, not the credit card company. Users don't have to pay the issuer because they had nothing to do with the account being approved in the first place. The owner is solely liable for the account, and if she dies when a balance remains, the issuer can't turn to any of the authorized users for recompense. Whatever is owed will have to come out of the owner's estate.

As you can see, if your daughter was just one of these ascribed account guests, whether she activated the card or not, she's free from financial responsibility. However, if the accounts are not being paid, she ought to call the creditors to remove herself from the accounts right away to stop any negative account information from appearing on her credit reports.

On the other hand, if what really happened was that your ex didn't add her to the cards but instead opened new ones with your daughter as a either a co-signer or joint account holder, your daughter will have to pay the balance due. The reason for this is that the credit issuer looked at her credit report and income information as well as that of her mom's, and they gave one line of credit to both of them. The primary accountholder may have received the bills, but in the end, both are legally responsible for making sure the charges are paid according to the terms of the initial agreement no matter who made them or if the card was activated or not.

If your daughter doesn't know which designation she is, there are two simple ways she can find out. One is to contact the creditors and ask. They should be able to tell her quickly. If she is just an authorized user, it will also be a good time to ask to be removed from the account.

The other method is for your daughter to pull copies of her credit reports and see if the accounts show up as jointly held. I would recommend that she do this anyway, since an annual credit checkup is the best way to ensure correct and healthy reports. 

See related: Co-signer, joint account holder, guarantor: Know the difference, Removing an authorized user from a credit card

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Updated: 03-22-2019