Taking the Heat: Can You Be Held Accountable to Someone Else’s Credit Card Debt?

Before you agree to become a guarantor or open a joint credit card, make sure you know these facts.

Though most people don’t realise it, you can sometimes be forced to pay credit card debt belonging to someone else. Such occurrences are rare, but it is better to arm yourself with the information needed to avoid such a scenario.

Generally speaking, you cannot be held liable for credit card debt belonging to someone else, be it your child’s, spouse’s or anyone else’s. However, this can change if you co-signed on the credit card debt or acted as a guarantor for the person in debt. As a guarantor, you basically sign a contract saying that any credit card debt will be transferred to you should the owner default, or not be able to pay it back.

To avoid a situation where someone could take advantage and accrue credit card debt that you would be later forced to pay on their behalf, it is better to insist that everyone—be they your children, partners or close friends—take sole responsibility for their own credit cards. If anyone has access to your credit card details, you should be aware of how they use them so as to protect yourself from misuse of funds and the accumulation of debt you would later have to pay.

How to become accountable for someone else’s credit card debt

• When you act as a guarantor. A guarantor acts as security to a bank when one is opening a credit card. As the guarantor, you are required to sign an agreement that legally allows the bank to transfer all debt to you should the cardholder fail to make repayments. Therefore, it’s important that you read through any contract that ties you to the debt before signing it.
• When you open a credit card for someone else. If you open a credit card for a partner, spouse or child and use your information on it instead of theirs, you’re basically fully liable for any debt they accrue. The person you open the credit card for would be under no legal obligation to repay any debt on the credit card, so opening a credit card for someone in your name can leave you dangerously exposed to debt.
• Opening a jointly-held credit card with a partner. You could be forced to pay your partner’s credit card debt even if you are joint card holders and both of you contributed to building up the debt. This happens if you sign the credit card agreement alone when opening the card, making you solely responsible for any debt on your jointly-held card. Be sure that you and your partner both sign the credit agreement so that you are both equally responsible for any debt you build up.

How to check if you are accountable for someone else’s debt

Being in a partnership or marriage does not necessarily mean that you are responsible for the credit card debts of your partner or spouse. It’s important to check whether you are actually liable for the debt of your spouse, child, partner or even friend before starting negotiations with their creditors. You might actually be surprised that you are not liable for any debt creditors are demanding from you. Below are a few tips on how you can check whether you are accountable for someone else’s debt.

If you have opened a joint account with someone and have a jointly-held credit card, this means that you are equally responsible for repaying any debt accrued. You can check whether you are liable for your partner’s debt by confirming if the credit agreement bears your signature. If not, the responsibility to pay the debt will be solely on your partner.

You could also be forced to pay any credit card debt accrued by an authorised user of your card. An authorised user enjoys the privilege of using the credit card but has no liability to repay any charges he makes. If you own a joint account in your marriage, you could be accountable for any purchases and overdrafts your spouse makes even if you are not named as a cardholder, so always make a point of keeping track of your monthly credit card report to check on your spending.

What happens to debt when someone dies?

In case of death, a debtor’s assets are usually used to pay for any credit card debt they solely owe. Once all the estate left behind is sold, the remaining debt is said to have died with the deceased and there is nothing creditors can do to recover it. Family members and even partners are not responsible for any of the debt remaining. However, in cases where the deceased had a guarantor for his credit card, the guarantor will be accountable for the debt.

Should a joint credit cardholder die leaving a debt for which a partner is jointly responsible, the surviving partner will be required to clear the credit card debt on their own. If the deceased signed the credit agreement on his own, his partner cannot be liable for any credit card debt left behind—even if he was an additional cardholder and had a hand in the build-up of existing overdrafts and loans. Family members or partners of the deceased can only be accountable for his debt if they were co-signatories in the debt or if they had made an agreement, be it written or verbal, to repay the debt on his behalf.

How to pay off someone else’s credit card debt

If you decide to help someone pay off their credit card debt, you should be fully aware of the risks involved so that you can prepare yourself to take on their financial burden. Firstly, you will have to contact the bank that issued the credit card and request that they make you a guarantor for the debt. This would transfer all liability for the debt to you and allow you to clear the debt from your own account. Becoming a guarantor will require you to give your personal information and sign an agreement transferring credit liability to you. If the debt has already gone into collection, you will not be able to become a guarantor and may be forced to make payments directly to the creditor’s account.

Another way to help pay off someone else’s credit card debt is to transfer all their debt to a credit card in your name. Be sure that the credit card you transfer the debt to has sufficient credit and notify the creditor that you are assuming the entire debt. Making such a transfer would make repayment more flexible as it would remove all the debt from the previous debtor’s account, allowing you to pay it in whichever way you want. To successfully pay off someone else’s credit card debt, you will need their personal information and the creditor’s details.

Being forced to carry the liability for someone else’s credit card debt can put a strain on you financially and even ruin your credit rating. By knowing how you can protect yourself from irresponsible card users who may misuse your credit facility and leave you in financial ruin, you can ensure that you are left in control of your credit card debt and that you are able to dispute any debt that you are wrongly asked to take care of.

Find out what institutions offer joint credit cards