Help! I opened cards fraudulently, ran up big card debt

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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Dear Opening Credits,
I'm 17 and have recently opened credit cards without consent in my parents' names. I'm severely in debt, but not sure what to do?  -- Zarrick


Dear Zarrick,
Although you're right to be upset, I can alleviate your major worry: In general, minors cannot enter into legally binding contracts. That means that you're probably not only safe from serious legal ramifications, but even from having to pay for everything that you charged.

This doesn't get you off the moral hook, though. Who deliberately opened the accounts and ran up the debt? That would be you. Therefore, the right thing to do is to delete what you owe to the best of your ability. Here are a few ways to do that:

  • Repackage everything that can be returned to the stores. You should not keep anything that you obtained with these credit cards. If you can get a reversal of charges, the value of each item will be deducted from the amount owed.
  • Sell what you can't return. If you purchased any electronics, such as cellphones and tablets, search online for technology resale sites. Use one to sell off the merchandise. You can list the rest of the stuff, such as clothes and sports gear, on eBay or Craigslist. Or ask your friends if they'd like to buy them off you. Send all proceeds to the issuer.
  • Drain your personal savings to make a dent in the remaining balance.

Even after these actions, there may still be a balance to contend with. The payments should be a lot smaller, however, as the minimum is based on a percentage of the outstanding debt. For example, on a credit card debt with typical terms and rates, the minimum expected payment on a $5,000 balance would be about $113, but it would drop to around $45 if the balance was $2,000.

Since you kept up payments before the debt ballooned out of control, I'm presuming that once it's down you can get back on track. Send at least the minimum payment until the accounts are fully paid. 

In the event the payments are still too high to manage, contact the issuers. Explain what happened -- that you applied for the cards before the age of 18, but you still want to make good on your obligation. Ask if they can help you meet that goal by reducing the payments to a more affordable level. They should be willing to bend, as recouping the funds might be quite difficult (if not impossible) should you decide to simply abandon the account.

As for the credit issuer garnishing your wages, that would be a possibility if you were an adult when you opened the accounts. When debts are outstanding for too long of a time, issuers sometimes choose to sue delinquent cardholders. If they win the case -- and they usually do -- the issuer may be able to claim a portion of the person's paychecks until the debt is satisfied. Because of your age, though, this is a highly unlikely scenario.

Regarding your parents, of course they are shocked and dismayed. I would be, too. Still, you can turn their perception of you around by making and keeping the commitment to dealing with your debt responsibly. After that, your reputation with Mom and Dad as well as the creditors should be repaired, and you can start again with a clean slate.

See related: Credit reports key to detecting fraud 

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Updated: 01-20-2018