You Might Commit Fraud and Not Even Know It

It's one of the most traumatic moments in life that most of us will ever face... losing our spouse.

It takes an incredible emotional and mental toll. And while dealing with your grief, you still have things to take care of...

  • Arranging the funeral
  • Getting the death certificate
  • Calling utilities, the bank, and Social Security.

But some things are likely to slip through the cracks. A common one – calling the credit-card company. That's because so many people don't understand the structure of credit-card accounts, and they're not prepared in the event of a death.

It could also lead you to commit unintentional fraud... And it's not as uncommon as you might think. Let me explain...

Most credit-card accounts have a single owner. Others may appear on the account, but they're simply authorized users, not owners. For instance, your spouse might own the account and add you on as a user. While you might consider that credit card jointly owned, the credit-card company doesn't.

For credit purposes, it makes sense. The liability for payment rests with the owner only. This means only the owner is legally responsible for paying the bill, regardless of the authorized user's spending.

Unfortunately, this also means that once the credit-card company learns of the owner's death, the account closes, and any authorized users lose access. That might mean your credit card is suddenly declined when you're trying to buy groceries. If you don't have another way to pay, you're stuck.

What's more, you can't transfer ownership of credit cards, meaning the surviving spouse can't take it over upon the death of the owner.

Worse, it can also spell legal trouble. If the owner of a credit card dies and an authorized user continued to use the card of the deceased, the police could arrest the card user for fraud. That's because the estate pays off all debts. But if the estate can't afford to pay off those debts, the creditors would likely be out of luck. So a person might rack up credit-card debt before or after the legal credit-card owner dies knowing it won't be paid off.

To avoid the risk, it's better to stop using the card right away.

Now, there is the possibility of getting a joint credit card. For liability purposes, both owners are responsible for paying off all charges.

To apply for a joint account, both people need to apply at the same time. That way both owners have their credit history evaluated and rated. Even then, many traditional credit-card companies don't allow joint accounts.

In fact, according to, American Express, Capital One, Chase, Citibank, and Discover all refuse to offer joint accounts. Wells Fargo and Bank of America offer joint account cards, as do a few local banks we checked out here in Baltimore.

You might consider a balance transfer, but beware... both people involved must be alive. A balance transfer moves debt from one card to another. The cards can be in different names, but both people must agree to it. If your spouse is ill and the sole owner of your cards, it might be a good idea to transfer any debt to cards in your name.

If you aren't sure if you have a joint account or if you're an authorized user, call the credit-card company and ask about the account. If you aren't an owner, they may refuse to speak to you about account details. If they do, ask about liability. If it's shared, you're a joint owner.

Personally, I always recommend paying off credit-card balances every month. I also like to shop around for the best deals to fit my lifestyle. So, I suggest each spouse get his or her own credit cards and enjoy all the benefits that way. One of you might use a travel card for air miles while the other uses a cash-back card. That way, no matter what happens, you won't find yourself unable to pay.

Credit cards are just one thing to consider after the loss of a loved one. We put together a starter guide to help you after the funeral – read it right here.

What We're Reading...

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
February 20, 2020