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Taking the heat: Can you be held accountable for someone else’s credit card debt?

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

Though most people don’t realise it, you can sometimes be forced to pay the credit card debt that belongs 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, spouse or anyone else. However, this can change if you co-signed for the credit card or acted as a guarantor for the person in debt. As a guarantor, you sign a contract saying you authorise any credit card debt to be transferred to you should the owner default, or can’t pay it back.

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

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

  • When you act as a guarantor. A guarantor acts as security to a bank when someone is opening a credit card. As a guarantor, you sign an agreement that legally allows the bank to transfer all debt to you should the cardholder fail to make repayments. Therefore, it’s essential to 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 instead of theirs, you’re fully liable for any debt they accrue. The person you open the credit card for is under no legal obligation to repay any debt on the credit card. Be aware that 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 may be forced to pay your partner’s credit card debt, even if you are joint cardholders and both contributed to the debt. This happens if you sign the credit card agreement alone when opening the card, making you solely responsible for any debt on the jointly-held card. Be sure that both you and your partner sign the credit agreement, so you are equally responsible for any debt you accrue.

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

Being in a partnership or marriage does not automatically mean you are responsible for your partner or spouse’s credit card debt. It’s important to check whether you are liable for your spouse, child, partner or friend’s debt before starting negotiations with their creditors. You might be surprised to discover you are not liable for the debt creditors are demanding from you. Below are a few tips on how to 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, it 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 is solely with your partner.

You can 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 the charges they make. If you have a joint account in your marriage, you could be accountable for any purchases or overdrafts your spouse makes even if you are not named as a cardholder. Always make a point of keeping track of your monthly credit card statement to check on your spending.

What happens to debt when someone dies?

In the case of a person’s death, their assets are typically used to pay for any credit card debt they solely owe. If the estate left behind is sold, any 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 the remaining debt. However, when the deceased had a guarantor for their credit card, the guarantor is accountable for the debt.

Should a joint credit card holder die, leaving a debt for which a partner is jointly responsible, the surviving partner must clear the credit card debt. If the deceased alone signed the credit agreement, their partner is not liable for any remaining credit card debt, even if they were an additional cardholder and contributed to the build-up of existing overdrafts and loans. Family members or partners of the deceased are only accountable for the debt if they were co-signatories, or they made an agreement, be it written or verbal, to repay the debt on their 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 risk involved so you can prepare yourself to take on their financial burden. Firstly, you have to contact the bank that issued the credit card and request that they make you a guarantor for the debt. This transfers all liability for the debt to you and allows you to clear the debt using your own account. Becoming a guarantor requires you to provide your personal information and sign an agreement transferring credit liability to you. If the debt has already gone into collection, you cannot 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 their debt to a credit card in your name. Make sure the credit card you transfer the debt to has sufficient credit and notify the creditor that you are taking responsibility for the entire debt. A transfer makes repayment more flexible, as it removes all debt from the previous debtor’s account, and allows you to pay it in any way you want. To successfully pay off someone else’s credit card debt, you 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. 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 you are in control of your credit card debt and that you can dispute any debt you are wrongly asked to pay.

Find out what institutions offer joint credit cards

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