Being an authorized user on another person’s credit card can help you establish your credit history. Parents might add their children to help launch them into adulthood. Or spouses may share an account, with one spouse as the authorized user. But if the primary cardholder passes away, the authorized user is left with a card in limbo.
After my grandfather passed away earlier this year, my grandmother — a longtime authorized user on her husband’s cards — was left without any in her own name. What followed was a brief scramble to figure out whether she could qualify for a new card, given the credit history she’d established.
In her case, she was able to qualify for several cards, but it was a mixed bag in terms of how issuers responded. One immediately offered the same card, under a new account in her name. Another asked her to reapply, rejected her, and then later approved her after another attempt at applying.
If you’re an authorized user, having a plan in place in case the primary cardholder’s account is closed for any reason (including death, as difficult as that can be to talk about), is a smart move.
Here’s what to expect if you’re ever in this situation.
You won’t be responsible for any debt
If the primary cardholder was in credit card debt, don’t stress. You’re not on the hook for any of it.
According to Drew Tsitos, manager of credit card products at Navy Federal Credit Union, the debt would be paid out of the deceased’s estate. “A true authorized user is simply authorized to use the account, but is not directly responsible for the health of the account or the payment.”
However, if you’re also a beneficiary of the estate, you can be affected. Any debts the estate must pay down will lower the sum of money you could receive. And in community property states, spouses may be responsible for credit card debt incurred during their marriage, the Federal Trade Commission notes.
You can find a full list of community property states on the IRS.gov website.
Stop using the card and call the issuer
If the deceased was your close relative, such as a spouse or parent, you might be the one taking on the task of settling their financial affairs. Notify the credit bureaus and the banks or credit unions they had cards with of their passing.
(They might find out by other means, like a notification from the Social Security Administration, but it’s worth speaking to them so you know how to proceed with account closures.)
Check your credit reports
Tsitos recommends checking your credit reports to see which reports show the card or cards on which you were an authorized user. He says that card issuers handle authorized users differently when it comes to reporting payment activity to bureaus.
Once the issuer closes the deceased person’s card, you’ll see a closed account on your credit report. This could ding your credit scores temporarily, similar to what could happen if you were to close a credit card of your own.
“You will see some variance,” Tsitos says. “That’s totally normal.”
Apply for a new credit card
If you’d like your own card account, the next step is to look for cards and apply. The application will ask for your financial information, and this can be tricky if you’re a nonworking spouse or you’re retired and don’t work for income.
However, you can report income from investment dividends and interest, withdrawals from retirement accounts, Social Security, public assistance or even money you receive as support from someone else (say, financial help from another relative).
One place to start is the issuer of the card you were an authorized user on, since you’re somewhat “known” to that bank. You can also consider a secured credit card, which can be easier to qualify for if you have limited credit history.