Credit Cards and Divorce: What you Need to Know
Simply put: understanding your rights concerning your joint credit card accounts is a must when speaking of divorce.
We’ve all heard the horror stories of a spouse being sidelined with incredible credit card debt from a spend-happy, vindictive, soon-to-be-ex. Although this scenario is not common, it is important to understand the steps you need to take to safeguard your credit, both during and after a divorce:
- Get a credit card in your own name – It’s no secret that divorces can wreak havoc on an individual’s credit, so it is best to secure a credit card with a competitive interest rate now, before the divorce proceedings get underway.
- Contact the creditors of your jointly held credit card accounts to update your personal information. Obtain and keep a current credit card statement as proof of your jointly held debt; therefore, your soon-to-be-ex will be held responsible for any debt put on the card from here on out. You may also have the right to freeze the account from any further activity until the divorce is finalized.
- If you and your spouse are still on speaking terms, have a frank discussion about your joint credit card debt and how it will be paid off. Many couples choose to pull money from a home equity account or savings to pay off the debt, thereby resolving this issue of the divorce.
- Order a copy of your credit report once the divorce is finalized, or several times throughout the divorce if the process of lengthy. Make sure there are no new accounts in your name, or that accounts that were previously closed are now open.
- Remember to update your address, if necessary, so that you can stay on top of your credit card bills. Now is not the time to fall behind on your credit card bills!
Although a divorce is a difficult process, often riddled with emotions and hurt feelings, it is vital that you tend to your credit card debt and other personal debt so that you won’t be left with a damaged credit score.
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