What Happens to Credit Card Debt When You Die?

It’s a scary thought: What happens to credit card debt when someone dies? Does it fall on their kids? Their spouse? Their parents?

Here’s the good news: Most of the time, credit card debt is paid from the deceased person’s estate—not passed down to family members. (A person’s estate is all the assets they own—such as bank accounts, houses, cars and other possessions.) But there are a few important exceptions you need to understand.

Whether you’re worried about leaving debt behind or inheriting it from someone else, we’ll break down exactly how it works and how to protect yourself.

Who’s Responsible for Credit Card Debt After Death?

Credit card debt doesn’t just disappear when someone dies—but it doesn’t automatically become your problem either. Here’s how responsibility is determined.

The deceased person’s estate pays first.

Like with most debt after death, if someone dies with credit card debt, the remaining balance is paid out of their estate. An estate includes everything they owned—bank accounts, vehicles, real estate and personal belongings.

The executor (someone chosen to represent the deceased’s wishes) handles the probate process. This is when the deceased’s taxes and debts get paid, as well as when property and possessions are given to the people listed in their will (aka their beneficiaries).

During probate, the executor will use the deceased’s estate to pay off their creditors (whoever they owe money to). If a person’s estate does not have enough cash to cover all their debts, the executor may have to sell that person’s assets to settle with the creditors (this is called liquidation).

Assets that list a beneficiary in a document other than the will (like life insurance policies, retirement accounts or living trusts) don’t have to go through the probate process. But everything else is fair game—even if it’s listed in a will. So if you were planning on passing down your vintage car or signed guitar, just know a creditor could get their hands on it before your kids do.

What Creditors Can—and Can’t—Touch

Here’s some good news: Creditors don’t automatically get everything.

Certain assets are typically protected when someone passes away—especially if they have a named beneficiary. These often include:

• Retirement accounts like 401(k)s, 403(b)s, SEP IRAs, SIMPLE IRAs and Roth IRAs
• Life insurance payouts
• Assets held in a living trust
• Brokerage accounts with designated beneficiaries
• Homes (depending on how the property is titled and your state’s laws)

When a beneficiary is listed, those assets usually pass directly to that person—not through probate—and creditors generally can’t touch them.

A joint account holder may be responsible.

If the credit card has a joint account holder listed, that person automatically becomes responsible for keeping up with the payments and any debt associated with the card. (This does not include authorized card users, though.)

The good news is, if no one else’s name is listed on the credit card account besides the deceased’s, the debt does not pass on to anyone else.

So this is your reminder to never cosign for someone else or let someone cosign for you! Because if the person can’t pay (whether they’re dead or alive), you could get stuck paying for their debt. It’s messy all the way around.

Joint Account Holders vs. Authorized Users

This is an important distinction. A joint account holder (someone who applied for the card and agreed to be equally responsible) is legally on the hook for the balance. If one person dies, the other still owes the debt. That responsibility doesn’t disappear.

An authorized user, on the other hand, was simply given permission to use the card. They didn’t sign the credit agreement, so they’re usually not responsible for the debt after the primary cardholder passes away. Knowing the difference can save your family a lot of stress—and potentially a lot of money.

A surviving spouse may be responsible in some states.

Some states have community property laws that make surviving spouses responsible for any debt the deceased took on during their marriage. And yep, that includes credit card debt.

Community property states include: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. So if you live in one of these states, just know your spouse could end up taking on your credit card debt should something happen to you.

What Happens if an Estate Cannot Pay the Credit Card Debt?

If there’s no joint account holder or legally responsible spouse, and the estate doesn’t have enough money to cover the credit card balance, the remaining debt usually goes unpaid. That’s because credit card debt is unsecured debt, meaning there’s no collateral (something the lender can take if you don’t pay) like there is for a car loan or a mortgage.

So if there isn’t enough money in the estate to cover the credit card debt balance, creditors will typically take a loss and write off the amount.

But that doesn’t mean you should rack up a bunch of credit card debt! Any debt you die with can eat away at whatever you hope to leave behind for your loved ones.

Plus, with an average interest rate of 22.3%, credit card debt is stealing from you every day!¹ You can’t afford to carry that debt to your grave.

What to Do if a Loved One Dies With Credit Card Debt

Losing someone you love is hard enough. The paperwork that follows shouldn’t make it worse. If you’re handling their finances and discover credit card debt, don’t panic. Take it one step at a time.

1. Stop using their credit cards. 

If you’re only an authorized user, stop immediately. Using the card after their death (even for “estate expenses”) can create legal trouble. Only joint account holders are responsible for the balance.

2. Make a list of accounts.

Gather statements, check online accounts, and go through the mail to track down all the accounts in your loved one’s name. If needed, the executor or surviving spouse can request a credit report to identify open accounts.

3. Call the card issuers.

Notify each company of the death. If the card was in their name only, close it. If it’s a joint account, the surviving cardholder can decide whether to keep or close it.

4. Notify the credit bureaus.

Contact Equifax, Experian and TransUnion to report the death. This helps prevent identity theft because fraudsters sometimes target estates. (How rotten is that?)

5. Keep up with joint payments.

If you’re a joint account holder, continue making at least the minimum payments while the estate is settled. If you’re just an authorized user, you’re not responsible, so don’t start paying.

6. Understand your state’s laws.

In community property states, a surviving spouse may be responsible for debts from the marriage. If you’re unsure, talk with an estate attorney for clarity.

7. Make a plan if you’re responsible.

If you’re a joint account holder or legally responsible under your state’s laws, own it and make a plan to pay it off as quickly as possible. Get on a budget and attack the balance so it doesn’t hang over your head any longer than it has to.

How to Track Down Outstanding Credit Card Debts

Wondering where to start when it comes to tracking down what credit card debt someone might owe? Thankfully, there are a few ways to put the puzzle pieces together.

• Request a credit report. The executor or spouse can pull one to see most open accounts.
• Check the mail. Bills and statements often reveal what’s still active.
• Review financial records. Bank statements and tax returns can point to recurring payments.
• Talk with the executor. They’re responsible for identifying and settling debts.
• Search secure storage. Check filing cabinets, safes or deposit boxes for account paperwork.

With a bit of detective work, you can get a clear picture of what debts (if any) still need to be handled after someone’s passing.

Your Credit Card Debt Doesn't Have to Stick Around Forever

No matter how much credit card debt (or any other debt) you have, there’s still hope! It’s never too late to get the help you need.

A great first step is finding a counselor who can help you emotionally navigate your specific situation. And when you’re ready, a financial coach can walk you through your next money steps and help you get back on your feet. Just remember, you don’t have to do this alone!

How to Get Rid of Credit Card Debt for Good

You don’t have to live with credit card debt for the rest of your life. Here are some steps you can take to get rid of credit card debt once and for all!

Break up with your credit cards.

You can’t solve a problem while continuing to create it. It’s time to stop borrowing money and say goodbye to credit cards for good. That means cutting up your cards so you can no longer use them. Yep, every last one.

But how will I pay for things? With cash or a debit card (aka money you actually have in your bank account). That may sound scary right now (especially if you’ve been relying on credit for a while), but you will survive without a credit card. In fact, you’ll thrive! Because let’s face it: Credit cards haven’t done you any favors. They’re not a safety net—they’re a debt trap. And you’re better off without them.

Also, watch out for “quick fixes” for your credit card debt—things like balance transfers, debt consolidation or other types of loans. All they do is trade one debt for another and make your problem way worse. The only way out is to attack your credit card debt head on.

Get on a budget.

Everyone needs a budget. But if you’ve been relying on credit cards to get by, a budget is a total game changer (in a good way).

When you have a budget, you can make sure your basic expenses are covered so you don’t have to borrow money to get through the month. Plus, it helps you find more money to throw at your debt!

If credit card debt has you feeling out of control, a budget will help you take control. Get started by creating a budget with the EveryDollar budgeting app. If you’re sick and tired of credit card debt ruling your life, a budget is your first step toward freedom!

Use the debt snowball.

Plenty of debt-payoff methods exist. But the debt snowball is the best one, hands down!

Start by listing all your debts from smallest to largest (including any other debt you may have, like student loans or car loans). Then pay minimum payments on all your debts except the smallest. Throw as much money as you can toward paying off that smallest debt. Once it’s gone, take what you were paying on that debt and add it to your payment for the next-smallest debt. Repeat until you’re completely debt-free!

Breaking down your credit card debt into smaller chunks makes it feel less overwhelming. And as you knock out each card balance one by one, those quick wins will motivate you to plow through the rest of your debt. That’s why the debt snowball works—because it actually helps you make progress!

Take a Financial Peace University class.

We’ve all made mistakes with money. But you don’t have to stay stuck and stressed. You just need the right plan to turn things around.

If you want to finally take control of your money, Financial Peace University (FPU) will show you how. In this class, you’ll learn how to pay off your debt, save for emergencies, and build wealth for the future. And the best part is, you’ve got a community of people who are on the same journey as you, cheering you on!

FPU has helped nearly 10 million people change their lives—and now it’s your turn.