Am I liable for debts on an additional credit card?
"My ex partner was an additional cardholder on my credit cards. I have since found out that they've withdrawn cash without my knowledge. I have now cancelled the cards but will I be liable for the debt?"
The answer, unfortunately, is a resounding yes.
Credit card companies are explicit about who has responsibility for managing and, ultimately paying any debt on, additional cards. It's the main account holder.
In terms of getting money back, it's also bad news.
There's no legal recompense unless the partner forms one half of a marriage or civil partnership.
Additional cards: liability
Credit card companies' policies for additional cards can be found in their terms and conditions but these are fairly standard across the industry.
The main cardholder is responsible, fully responsible, for any debts on the card, including those that are incurred by an additional cardholder on the account.
Some card providers are even clear about who's responsible for making sure additional cards aren't misused by supplementary cardholders.
This is from the American Express terms and conditions, for example:
"It is your responsibility to ensure that there is no prohibited use of your account by you and any supplementary cardholders. You will be responsible for any prohibited use of your account even if we did not prevent or stop the prohibited use."
Other credit card providers have different terms but they tend to follow this basic pattern.
Remember that the relationship can also be rough on the additional cardholder, however.
Their cards can be cancelled by the main account holder with a phone call and they have limited other access to the account.
For example, additional cardholders cannot have their own internet banking account, instead they must use the primary cardholder's.
Any rewards credited to the account as a result of spending - say, Avios air miles - will go to the reward account set up by the primary cardholder. Again, there is no way of sharing equally, unless the primary cardholder makes an effort to do so.
The solution: caution
It would hardly be cynical to say that the solution to these problems is extreme caution when it comes to the issuing of additional credit cards.
Most banks and credit card providers already limit the type of person that can be an additional cardholder on an account, presumably to prevent problems down the line. In general, an additional cardholder must:
- Have the same primary address as the main cardholder: primary address is key here, it's ok if one partner is away a lot for work or the card has been issued to a student who is living in their university town, as long as the primary address is the same.
- Be a close family member: this is usually defined as a spouse or a partner or grandparent, parent, brother, sister or dependant.
(See this guide for more on making card applications.)
A safer alternative is getting a truly joint credit card, one in both partner's names, to help to sidestep potential problems from occurring.
As the Citizen's Advice Bureau note ensuring that partners are jointly responsible for borrowing facilities they both use can help to resolve problems easily later on.
If both parties signed the product's credit agreement, that means that "joint and several liability" applies to both.
It's a fairer way to obtain credit especially for those not ready to elevate their relationship to a legally recognised status in which case, as we note below, the debt may form part of the divorce or settlement process.
The only problem is that not all credit card providers offer joint products, so this may be worth considering sooner rather than later.
In addition, holding a joint product makes two parties financially linked which, as we note here, can have its own problems.
Sadly, it's not uncommon for disgruntled ex partners to vent their anger or disappointment by racking up debt on their previously loved one's additional cards.
Perhaps more common is a disagreement about who should repay debts, and how much, after a relationship breaks down.
Even if a loan were taken out primarily to help the other partner, the other partner has no legal obligation to help repay them, if they are not named in the credit agreement.
As we've seen, credit card debts, loans and other liabilities are generally the sole responsibility of the person in whose name they are in.
However, there is an exception.
If the two partners are married or in a civil partnership, the debt may be split between the two of them during a separation, especially if they both benefited from the borrowing.
In the short term, it may be necessary, and will probably be preferable for everyone in the long term, to come up with an informal agreement to ensure that debt commitments continue to be adhered to.
The Money Advice Service has more information on dealing with financial matters after divorce or separation.
As we've said, however, in the eyes of the financial world, simply living together is meaningless, regardless of how long the relationship has lasted so it's likely that people in this situation will have to resolve matters by other means, for example a formal mediation or through the small claims court.
The Citizen's Advice Bureau offer support in these situations.