One of the main issues that people deal with in today’s more digitally connected society is credit card debt. In order to avoid difficulties, many people use these cards, putting off the payback problem until later. It’s critical to comprehend the terms of these cards because many people overlook them and wind up in additional trouble.
The first quarter of 2025 saw an average of $6,618 in credit card debt for Americans, with interest rates averaging 21.37%, according to data from Experian. According to a recent survey conducted by Debt.com, 55% of Americans anticipate leaving debt after death, and in the majority of those cases, they estimate that the debt will be at least $5,000.
Credit Card Debt Inherit
Usually, these debts are settled by the estate of the deceased. If the estate is unable to cover them, the remaining amount might not be paid, relieving the surviving family members of the burden. “Generally, you will not inherit debt from a loved one if you are a co-signer on the debt or it is combined debt, such as a joint credit card,” New York-based money and debt expert Leslie Tayne, head of Tayne Law Group, noted in an interview with CBS News.
Similar to this, any outstanding obligations, including credit card payments, must be paid off by the deceased’s estate, which consists of their possessions and assets. This typically occurs prior to the heirs receiving the remaining assets. Co-founder of DePaolo & May Strategic Wealth, Kyle DePaolo, highlights that “the credit card business may only write off the debt if the estate is insolvent (i.e., debts exceed assets).”
According to the law, the family member would be responsible for the obligations in one of two extraordinary circumstances: If someone co-signed a debt or has a joint credit card account with the deceased, they are legally liable for the full amount owed. In certain states, if the debt was incurred throughout the marriage, the living spouse may be held accountable for the debt, whether or not they were a co-signer.
When someone dies, can you Inherit Credit Card Debts?
The debt of a dead person does not necessarily pass to you. However, you can also still be in trouble. What are the circumstances in which you are and are not liable for the debt of a spouse or loved one? The principal and co-founder of DePaolo & May Strategic Wealth in Irvine, California, Kyle DePaolo, states that “the decedent’s estate is answerable for disbursing any credit card debt, characteristically before any remaining land assets are distributed to heirs.”
The credit card company may wipe off the debt if the estate is insolvent in the sense that its debts exceed its assets. “Unless legally linked to the debt, family is not liable.” There are, however, typically two significant exceptions:
- Co-signers or proprietors of joint accounts could be held entirely responsible.
- In community belongings states, if the debt was taken out throughout the marriage, the spouse (and often the domestic partner) may be held accountable.
The debt is probably not yours if you don’t fit into any of those groups. Refer to an estate lawyer if you have any queries around your legal responsibilities.
What Happens to Credit Card Debt after Death?
Many misunderstandings exist regarding credit card debt and who is responsible for it in the event of a death. Confusing information from debt collectors and the internet simply makes matters worse. One of the most prevalent misconceptions, according to DePaolo, is that “if my parent dies with debt, I’m on the hook.”
“False—unless you co-signed or were a joint account owner.” Chris Diodato, founder of WELLth Financial Preparation in Palm Beach Gardens, Florida, adds, “I hear another myth that a creditor can take advantage of retirement savings.” “The majority of 401(k), 403(b), and IRA accounts are protected from creditors throughout one’s lifetime. No situation in my professional experience has required me to use an IRA or 401(k) account in order to pay creditors.
What if the Spouse dies with Debt?
When someone with credit card debt passes away, you should tell the credit card companies and send them a copy of the death certificate as soon as possible. Usually, after learning of the death, the card issuer will suspend collecting efforts and cancel the account. Moreover, update the credit report to reflect the deceased person’s passing and call the credit agencies to freeze their credit. This helps stop fraudulent activities under their name or identity theft. Never think that you are personally responsible for debt collectors’ calls. “Talk to an estate attorney before responding to any debt collectors,” DePaolo cautions. “Avoid settling anything personally too quickly.”
 Getting ready ahead of time is a smart way to prevent possible problems. “Pay close care to any debt that you co-sign on or are a dual owner on,” advises Tayne. She also points out that “significant other in civic property states, like California, must have a good idea of what kind of debt their spouse has incurred throughout their marriage to evade any unfriendly surprises if somebody passes away.”
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