Providing Holistic Solutions To

Family Law Disputes

Providing Holistic Solutions To

Family Law Disputes

3 ways credit cards can complicate divorces

On Behalf of | Jan 18, 2025 | Divorce

Married couples typically share their financial obligations and resources. For example, they often have joint financial accounts, including shared credit cards. Both spouses have their own cards attached to the same revolving line of credit. They can each make charges and share responsibility for paying the balance due to the credit card company.

When spouses divorce, they have to separate their financial circumstances. Not only do they need to divide their shared property, but they also have to split up responsibility for their shared debts. Credit cards can be a major point of contention in modern divorces for more than one reason.

What types of credit card disputes frequently arise during divorce?

Concerns about dissipation

The spouse who chooses to file for divorce might ask the courts to freeze their revolving lines of credit. They may worry about their spouse going on a vindictive shopping spree at their expense. People often try to prevent the abuse of shared lines of credit in the early stages of divorce by freezing or closing accounts shared by the spouses. Spouses may also need to look over records carefully in cases involving adultery or financial infidelity. Hidden debts and debts taken on for purposes that damage the marital relationship might be eligible for exclusion from the property division process.

Worries about default

When trying to divide credit card debt, spouses may feel anxious about trusting one another. After all, if the spouse who assumes responsibility for a shared credit card files for bankruptcy or fails to make payments, the other could face credit damage and collection efforts. In cases where people believe that financial misconduct is likely, they may need to look into alternate options, such as using marital resources to pay off the debt from the marriage instead of carrying balances forward after the divorce.

Issues with credit card rewards

The debt associated with credit card use isn’t the only property division issue that credit cards generate. Couples also have to address the rewards accumulated through credit card use. Those with higher incomes and decent credit scores are often eligible for credit cards that offer valuable rewards. People can gain access to airport lounges or earn free passenger tickets every year. They may have hundreds of dollars of rewards accrued on each individual credit card account that they have open. Spouses have to quantify the value of those rewards and then address them as part of the overall property division process to ensure a fair outcome.

Those preparing for a pending divorce need to learn about the various complications that might arise. Credit cards can complicate divorce proceedings, but spouses can plan in advance to address issues related to credit cards.