Transferring mom's balances to your cards? Not so fast

If you can afford to pay if she defaults, fine. If not, then don't do it

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the expert

Dear Credit Guy,
I allowed my mom to transfer a credit card balance to a credit card offer (low interest rate) that I received in my name only. The balance was $17,000, and now is at $15,000. My mom is 84, and she makes the payment every month. I'm worried that if something happens to her I will be responsible for the account. Is there anything I can do to put the account in her name and remove mine from it? Any suggestions? -- Dorothy

Answer for the expert

Dear Dorothy,
You are correct to worry: You are responsible for any balance on a credit card account for which you signed a cardholder agreement as the owner of the account. Right now, your mom is making the monthly payments on a card account you own. But if she is unable to in the future, for any reason, you will be the person who the card issuer calls if a payment is not received. Your credit score will be negatively affected if any payments are made late, and should things progress to a worst-case scenario, you would be the person sued in court to collect the debt.

I understand why you are worried about the account, and I only mention a worst-case scenario to illustrate that what many people believe is a good idea at the time --  helping a loved one out financially -- could potentially cause serious problems down the road. I recommend never making a move to help someone else's financial situation unless you can afford to take on the financial responsibility yourself.

If you cannot make the payments on the account balance of approximately $15,000, then you need to see what alternatives are out there to transfer the debt back into an account owned by your mother. My suspicion is that you ended up with the debt in your name because your mother did not qualify for a credit card with a lower interest rate. If that is the case, then you'll need to search for another option other than a credit card transfer.

If your mother owns a home, she could use some of the equity in the home to pay off the credit card in your name. A home equity line of credit or home equity loan should provide a low interest rate for your mother to repay the $15,000. Another option may be to sell other property or an asset that your mom may own. Should neither of these be a workable solution, you might consider contacting an attorney to determine what other actions might be available to you.  

One last thing I'd like you to keep in mind: Because you may be transferring a significant amount of debt that is currently in your name to your mother's, should anything happen to your mother, the transaction may look suspicious. To keep anyone from suggesting credit fraud, I recommend that you also keep the paperwork from the original transfer from your mother's account to yours. It is unlikely that such an accusation would occur, but it is better to have the paperwork to prove otherwise, just in case.

Take care of your credit!

See related: When family members ruin your credit, Bailing family members out of debt: Think twice, When family members use 'secret' credit cards

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Updated: 01-19-2019