Sally Herigstad is a certified public accountant and the author of “Help! I Can’t Pay My Bills: Surviving a Financial Crisis.” She writes “To Her Credit,” a weekly reader Q&A column about issues involving women and credit, for CreditCards.com. She also has written for MSN Money and Bankrate.com, and has guested on Martha Stewart Radio and other programs.
My sister-in-law used her late husband’s credit card for 15 years after his death and now wants to quit paying. Is this legal?
Using a card on which someone was never even the authorized user for 15 years is considered fraud. Once she stops paying, the issuer will find out the card wasn’t hers. She should tell the card issuer what happened, and that she intends to pay off the card or she risks getting sued for the debt.
Dear To Her Credit,
My sister-in-law has used her late husband’s credit card for 15 years since his death. She is not an authorized user. She had made regular payments until now. The original credit card had changed names twice while she had it. Shouldn’t the credit card company have looked up his Social Security number when they changed names and noticed that he was deceased?
Now my sister-in-law says she is going to cut up the card and quit paying. Will she still have to pay? She lives in Illinois. – Pamela
Fifteen years is a long time to use someone’s credit card after the cardholder’s death. I’ve heard of people continuing to use the card while things are being settled, and many continue to use the card for a year or two, perhaps not realizing they shouldn’t.
Using a card on which someone was never even the authorized user for 15 years, however, and going so far as to change the name on the card, is unusual.
Once she stops paying, the issuer will find out the card wasn’t hers
If your sister-in-law was paying the balance off every month or keeping it under control, you might think she viewed the card as “hers” because she’s been using it so long. But apparently, it’s only “her” card when she’s spending money on it.
Now, with a significant balance on the card that she doesn’t want to pay, suddenly it’s her late husband’s card again and she wants to just cut it up and walk away. If that makes sense to her, she’s not being completely honest with herself.
Regardless of how she has rationalized her actions in her own mind, she may not want to cut up the card and just quit paying now. She’s not likely to get away with it.
When she stops paying, the credit card company will try to collect from the late husband. When that doesn’t work, the card issuer will find out when he passed away and wonder who’s been making charges on the card for 15 years. Assuming the balance is significant, the card issuer will consider such misuse to be identity theft and fraud, which is taken very seriously.
Tip: When a cardholder dies, it is the duty of that person’s executor or representative to inform the card issuer of his or her passing and the card will be closed. It is never OK for someone else to use the card after the cardholder’s death, unless it is a joint account. Authorized user cardholders also are required to stop using a card when the primary account holder has died.
How are card issuers notified of a cardholder’s death?
I agree that it seems the credit card company should have noticed the cardholder had died. The credit bureaus receive notification from the Social Security Administration, and they make an indication of that in the deceased person’s file.
However, lenders don’t receive immediate, automatic notification of someone’s death. If no one tells creditors, they can go on for months or years without being aware that the cardholder is dead.
Of course, the oversight by the credit card company is not an excuse for your sister-in-law’s 15 years of charging. In fact, she or her husband’s personal executor or representative had a duty to inform the credit card company of her husband’s death at the time, and to pay off the card and his other debts off equitably with the money in his estate.
Your sister-in-law may have made an honest mistake in the beginning by using her husband’s card to get through a rough time. Maybe she never meant to keep it so long, or she thought she inherited it along with his other assets. But you can’t inherit a credit card. By continuing to use it for so long, and then trying to walk away from the balance, she has broken the law.
The best thing your sister-in-law can do now is to pay off the balance, if she can, and close the account. Even if she has to borrow money from other sources, or sell or cash in some assets, I would recommend she do so to pay off the card.
If paying off the card is not possible, she needs to come clean with the credit card company. She should tell them what happened, and that she intends to erase the debt. The card issuer primarily wants to get paid, so it may agree to close the card and accept payment terms.
Let’s hope she realizes the seriousness of her situation now and she takes immediate steps to make it right. Not doing so could result in serious consequences that may affect her for a long time to come.