The story always begins with “but I just wanted my wife to have an extension of my credit card, she never signed anything!” Yes, the gesture always starts with good intentions, but what people fail to see is that banks are very creative at covering their buts when it comes to extending credit. In fact, every time a client asks for a credit card extension, they smile as they’ve just added another layer of protection on their loans.
Many of our clients come to us looking for help with settling credit card debt they can’t afford. The moment I ask if the cards are joint of single, they sometimes say, single, but I gave my wife an extension. I then ask, “did your wife activate the card?” If the answer is yes, then she’s now fully responsible for all the debt if you default. What people don’t know is that when the credit card extension arrives, it comes with the terms of the agreement with the new card, and in most cases, the fine print will say that the moment you activate the card, you agree to the terms and conditions, which include taking full responsibility for any outstanding balance in the case the primary card holder fails to make payments!
Yes, I know I’m cringing too!
So what can you do to take your partner off as a joint credit card holder?
First, you need to bring the balance to zero, then call the credit card company and ask to cancel the card or report it as lost or stolen. Then have the extended card holder’s name removed. Only then can a joint holder be removed. If there is any balance on the account, then the lender can still go after the joint account holder.
Here’s an excerpt from the Financial Consumer Agency of Canada:
Who is liable?
Anyone who signs the application form can be liable for any outstanding balance. This applies whether or not you incurred the total debt.
For some credit cards, the terms may state that authorized users (secondary cardholders) can also be held responsible for any outstanding balances, even if they don’t sign the credit card application. Read the credit agreement carefully and make sure that you fully understand who is responsible. If you aren’t sure, ask the lender.
If you have any questions around credit card debt, contact me at firstname.lastname@example.org or visit www.vitalfinancial.ca