The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
Advertiser disclosure
The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
Jennifer is a contributing writer to The Points Guy where she focuses on family travel. She is also the founder of Deals We Like where she helps her readers travel on a deal.
April 20, 2023 • 9 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
Related stories
Quick summary
Dividing credit card debt during divorce depends on state laws, with joint responsibility differing between common law and community property states.
A divorce decree assigns debt responsibility, but creditors may still hold both parties liable for joint accounts regardless of the court order.
Protecting your credit involves monitoring your credit reports, closing or refinancing joint accounts and removing authorized users.
Establishing credit in your own name is crucial after divorce, especially if you previously relied on joint accounts.
What to consider
Creditors are not bound by divorce decrees, so missed payments by an ex-spouse on joint accounts can impact your credit score.
Closing joint accounts may temporarily lower your credit score due to increased credit utilization, but it reduces future risk.
Paying attorney fees with a credit card can earn rewards, but processing fees or carrying a balance may outweigh the benefits.
What you'll miss from the article
Detailed steps for safeguarding your credit, handling points and miles, and managing joint accounts during and after divorce.
Generated by AI with support from our editorial team.
Update: Some offers mentioned below are no longer available. View the current offers here.
Even the most amicable divorces are messy: dividing assets, hunting for a new place to live and adjusting to a new life, plus custody and child-care arrangements if you have kids.
Handling joint credit card accounts, splitting debts and staying on top of your credit score may be overlooked during a divorce. However, how you handle credit and debt during your divorce could have a lasting impact on your overall financial health long after the papers are signed and finalized.
Here's what you should do.
Dividing credit card debt during a divorce
Debt during a divorce is handled differently across states.
In common law states (most of the U.S.), you are responsible for any debts accrued solely in your name, and you're jointly liable for any debt in the names of both you and your ex-spouse.
However, in community law states (there are nine, including Texas and California), you are jointly responsible for all debt accrued during the marriage — even if it’s only in one spouse’s name.
How your debt will be divided will depend on the state in which you file for divorce, the judge and your particular circumstances. PICHSAKUL PROMRUNGSEE/EYEEM/GETTY IMAGES
In your divorce settlement, the judge will issue a decree in line with these rules and any other agreements between you and your ex-spouse. Among other things, your divorce decree states which party (you or your ex-spouse) is responsible for paying various debts — such as stating which person will pay off a joint mortgage.
But there’s a catch that shocks many people. Although the divorce decree binds you and your spouse, creditors generally aren’t.
If you and your former spouse signed a joint loan or credit card contract, the creditor still sees you both as responsible for the debt regardless of what your divorce decree says. If your ex-spouse is assigned responsibility for paying a mortgage but fails to pay on time, late and missed payments can be added to both of your credit reports. Thus, both of your credit scores could suffer.
The scenario above happens all the time. It’s one of the reasons why Experian recommends paying off or refinancing joint debt before the final divorce decree, if at all possible. If your ex-spouse doesn't abide by the divorce decree or fails to make payments, they can be held responsible in court — though your credit report may still suffer.
Protect your personal credit
Coming through a divorce with unblemished credit is tough, but it is possible — especially if you and your ex-spouse agree to the following steps.
Check your credit reports
Watching your credit reports from Equifax, TransUnion and Experian is important. However, it’s especially important during a separation or divorce.
If you want to be extra cautious, check your three reports:
Before you separate (or as soon as possible afterward).
Once a month after separation.
Be sure to save copies of your reports. If your ex-spouse opens or attempts to open credit in your name after separation, you'll have a paper trail and can act quickly if problems arise.
Tip: If you’re worried that your former spouse might try to open credit in your name during or after a divorce, a free credit freeze can help protect you.
You can check your credit reports online for free. JOHNER IMAGES/GETTY IMAGES
Separate joint accounts
Separating joint accounts and dividing debt is probably the most difficult financial aspect of a divorce. If you co-signed a loan or credit card with your spouse, the lender believes you’re both responsible for the debt.
The best way to protect your credit during a divorce is to pay off and close joint accounts as quickly as possible. Try the following:
Sell the asset (e.g., the home or car) and use it to pay off the loan. If there’s money left over, use it to pay off other joint debts.
Refinance the loan into one person’s name. Will your ex-spouse be keeping the house or vehicle? If so, it’s best to refinance the loan in their name. If there’s equity available in the home, your ex-spouse may agree to a cash-out refinance, using the available funds to pay off other joint debts, like auto loans or credit cards.
Close joint credit cards. It's typically best to close a joint credit card account during a divorce. This goes against standard credit advice and might harm your credit score if your credit utilization increases. However, if you don’t close the account, you risk legal liability for late payments and future charges from your former spouse.
Remove authorized user cards. Even if your former spouse isn’t a joint account holder on any of your credit cards, they may have authorized-user status on your account. If so, call your card issuer and remove your ex. Otherwise, you will be responsible for any future charges if your ex-spouse uses the account.
Build and maintain your own credit
Finally, make sure you have credit established in your own name. This is especially important if you only previously had joint accounts or authorized user credit cards.
Divorces certainly aren't cheap. We receive regular inquiries about paying attorney fees with credit cards. The answer always depends on whether your attorney accepts credit card payments without additional fees and when you'll pay the bills.
If your attorney doesn’t charge a processing fee for credit card payments, then a large bill (like a divorce) can accrue lots of points. However, even a 2% processing fee can eliminate the benefits of paying by card.
Also, will you accrue interest on your credit card? If you'll immediately pay your bills in full, using a card to earn rewards can be a silver lining in your divorce. However, if you would carry a balance by paying over time, you'll pay more in the long run and negate the value of the rewards.
If you pay by credit card, a flat-rate card will be best since attorney fees won't trigger bonus categories on most credit cards. Consider the following:
Citi Double Cash® Card: Earn 2% cash back on every purchase — 1% when making the purchase and 1% when paying the bill. The card has no annual fee (see rates and fees).
Capital One Venture Rewards Credit Card: Earn at least 2 miles per dollar on all purchases — a 3.7% return on spending in our valuations.
Chase Freedom Unlimited: Earn at least 1.5% cash back on all purchases with no annual fee.
Bottom line
You may feel overwhelmed during a divorce, and protecting your credit may seem unnecessarily complicated. However, ignoring this element can haunt you for years to come. Post-divorce, many people struggle with low credit scores and damaged credit reports, unable to qualify for loans, credit cards or even an apartment. Do everything you can to avoid these problems. Working to protect your credit up front might not be fun, but you’ll be grateful later.
Additional reporting by Michelle Black and Ryan Smith.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
