Credit Cards Still Charge Interest After You Die
There is a saying that after death you cannot take things with you. As far as your debt is concerned, it is because it continues to accumulate here on Earth.
In the case of credit cards, the deceased cardholder’s debt becomes the responsibility of his estate, and interest does not stop accumulating immediately. However, if the deceased person has a living co-author, the debt becomes his property, and, obviously, the interest continues to rise. Spouses may also find themselves on the brink of paying off debt in states with shared real estate .
However, according to CreditCards.com , there are restrictions and rules as to what creditors can charge a cardholder for after their death. For example, once the executor of the inheritance contacts the card company to obtain the deceased’s account balance, the card company “should not charge any fees from the account [eg late payment penalty, annual fee, or more — the ceiling fee] or increase any annual interest rate, ”according to the Credit Cards Act . (There are some exceptions to the APR freeze, including if the card has a variable rate.)
Residual interest – so -called “rolling interest”, or the amount charged between the invoice statement and the due date if you keep the balance on a monthly basis – must also be canceled or refunded “if the full balance is paid. within 30 days from the date the card issuer discloses the amount owed. “
The executor of the inheritance may also be able to pay less than the total debt to the credit card company to save time and money, the site said.
Here’s what to do if you are in charge of someone’s property after their death and they have credit card debt, according to CreditCards.com :
- Organize Their Accounts ASAP : Yes, it’s hard to think about seemingly small tasks to complete after the death of a loved one, but it’s necessary. “As a court-authorized representative or surviving spouse, you can request a copy of the deceased’s credit report, which lists all credit accounts held in the deceased’s name,” CreditCards.com said.
- Don’t Let Anyone Use the Deceased’s Credit Accounts : After your loved one dies, no one else can use their accounts – this is a scam. This includes authorized users (but not shared users).
- Obtain official copies of death certificates and mail them to each credit card issuer and each of the three major credit bureaus, and leave a few for inheritance.
- Notify credit card companies : Close all credit accounts of the deceased as soon as possible to avoid interest and possible late fees. “You should notify the credit card companies by phone and then by mail.” Please send the letter by certified mail and keep a copy for yourself.
- Freeze their credit reports at each of the three major bureaus to prevent identity theft. Then submit your email request (and keep a copy as above). You can contact the bureau by calling Experian (888) -397-3742; Equifax (800) -685-1111; and TransUnion (800) -888-4213.
- Bill Payment : Pay your creditors by paying attention to local laws and regulations. “Depending on state law, you may have to wait for a certain period of time for invoices to arrive and post a public death notice in the newspaper before you start giving out money,” CreditCards.com says.
One more thing to remember: scammers can strike when they see that someone is dead. According to CreditCards.com, “Identity thieves are looking at obituaries and online records for recent deaths so they can steal accounts or create new ones.” So you will want to take care of everything ASAP.