Nearly half of all marriages end in divorce. In many of those situations, couples struggled with financial problems that involved large amounts of credit card debt. So what happens to credit cards when a couple splits?

Credit Cards Post-Divorce — Joined Together…or Not?

Any individual credit card accounts you signed up for are your responsibility. It doesn’t matter whether or not you are married. You alone are responsible for paying back this credit card debt and can’t make your ex split the payments. There are some exceptions to this. Living in a community property state — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin — means you and your spouse may share responsibility for paying back the money.

When you open a joint credit card both of you must pay the bills. Delinquent accounts get reported on both credit reports, regardless of whether or not the marriage ends. It’s not uncommon for an angry ex to run out and make a lot of purchases to run up a credit card bill, then refuse to pay it. To avoid problems, close out any joint credit card accounts so the balance can’t grow. You will still be responsible for paying off the credit card debt so don’t stop making payments even if your ex refuses to help. Balance transfer credit cards can be used to set up a new individual account.

Credit Card Terms Are Important

Credit card companies won’t close your account just because you get divorced. But you might be required to reapply for credit on your own. If you’ve been in the position of never having a credit card in your own name, it’s important to understand what to look for when comparing credit card offers.

Always read the fine print that details the credit card terms. Among the things to look for are:

• Credit card rates for regular purchases, cash advances, and balance transfers. These rates may differ.
• Fees that may apply to late payments, balance transfers, annual service, foreign exchange, etc.
• Details and policies for rewards programs, frequent flier miles, or cash back
• How finance charges are calculated
• Date and time monthly payments are due

If you have a tough time getting approved for credit on your own, come up with a plan to budget your money so you can pay cash for purchases. Work on cleaning up a troubled credit history and paying off credit card debt and other bills to boost your credit score. It may take a while to improve your financial situation after a divorce, so don’t get discouraged.

Published 07/13/12