What Happens to an Authorized User When the Cardholder Dies?

When a primary credit cardholder passes away, individuals listed as authorized users on their accounts often face immediate questions regarding financial responsibilities. An authorized user is granted permission to make purchases using a credit card account but is not the primary owner or legally responsible for the debt incurred. This arrangement is common among family members. Upon the primary cardholder’s death, the authorized user’s access to the account ceases, prompting concerns about lingering debt and potential effects on their personal credit standing.

Authorized User Liability for Debt

An authorized user is generally not legally responsible for debts incurred on a credit card account after the primary cardholder’s death. This is because an authorized user is merely granted permission to use the card and is not a party to the original credit agreement. The obligation to repay the debt rests solely with the primary cardholder, so the debt does not transfer to the authorized user.

The debt associated with the deceased primary cardholder’s account becomes an obligation of their estate. An estate comprises all assets and property owned by the individual at the time of their death. During the probate process, the executor is responsible for settling outstanding debts and paying taxes before distributing remaining assets. Creditors, including credit card companies, can make claims against the estate for repayment.

Distinguishing an authorized user from a joint account holder or a co-signer is important for understanding liability. A joint account holder shares equal responsibility for the debt and has equal access to the account, meaning both parties are contractually obligated to repay the balance. Similarly, a co-signer agrees to be legally responsible for the debt if the primary borrower fails to make payments. In contrast, an authorized user has no such legal responsibility for repayment.

Rare exceptions exist where an authorized user might face liability. If the authorized user was also a co-signer on the account, they would be responsible for the debt. Additionally, if an authorized user continues to use the card after being notified of the primary cardholder’s death, such actions are considered fraudulent. This fraudulent use can lead to personal liability for charges incurred after the death, and may result in legal action.

Impact on the Authorized User’s Credit Profile

The death of a primary cardholder and subsequent account closure can affect an authorized user’s credit profile, though typically not negatively. While the authorized user benefits from the primary account’s positive payment history on their credit report, its removal does not usually result in a detrimental mark. The primary cardholder’s debt does not transfer to the authorized user, so it will not appear as a negative entry.

When an authorized user account is closed due to the cardholder’s death, its presence on the authorized user’s credit report is removed. This removal can influence certain credit metrics. For instance, the average age of accounts on the authorized user’s credit report could decrease, particularly if the deceased’s account was long-standing. A shorter average age of accounts can have a minor, temporary effect on a credit score.

The account closure reduces the total available credit limit for the authorized user. If the authorized user carries balances on other credit accounts, their overall credit utilization ratio—the amount of credit used compared to total available credit—could increase. A higher credit utilization ratio can lead to a slight decrease in credit scores. These adjustments are common consequences of any account closure.

The impact on an authorized user’s credit score is often less pronounced if they have other established credit accounts with a good payment history. For individuals who relied heavily on the authorized user account to build credit, the effect might be more noticeable. Authorized users should regularly check their credit reports to monitor changes and ensure accuracy after an account closure.

Steps for Authorized Users After Primary Cardholder’s Death

Upon the primary cardholder’s death, an authorized user should immediately cease all use of the credit card. Continued use, even for expenses related to the deceased, is unauthorized and can lead to legal consequences, including fraud charges. All physical cards should be destroyed.

The next step is notifying the credit card issuer of the primary cardholder’s death. This should be done promptly to ensure the account is handled and closed. When contacting the credit card company, the authorized user or the estate’s executor should provide the primary cardholder’s full name, account number, and date of death.

Credit card issuers typically require official documentation to verify the death. A certified copy of the death certificate is almost always requested to process the account closure. This ensures the account is closed correctly and no further charges can be made.

Beyond notifying the credit card issuer, it is prudent to inform the three major credit bureaus—Experian, Equifax, and TransUnion—of the death. While credit bureaus often receive notifications from the Social Security Administration, a direct notification can help prevent identity theft and fraudulent activity on the deceased’s accounts.

After notification and submission of required documents, the authorized user can expect the credit card account to be closed by the issuer. The debt becomes part of the deceased’s estate, and the authorized user is relieved of financial responsibility.