Protecting What Matters Most

2 credit card challenges in a high-asset divorce

On Behalf of | Nov 9, 2022 | Divorce

Property division will be different in every New York divorce. Couples acquire different assets and take on different debts throughout their marriages. Whatever they have not already addressed with a marital agreement will be at risk of division in their divorce. 

Frequently, high-asset couples focus more on their biggest belongings, like vehicles, retirement accounts and real property, rather than their financial obligations when separating their finances. However, credit cards can be a very important element to consider in your upcoming divorce.

Credit card debt is sometimes part of the reason why one spouse chose to file, and how you handle those debts will affect your financial stability for years to come. What two issues related to your credit cards will you need to resolve in property division discussions?

What happens with your credit card rewards?

If you participate in some of the paid credit card reward programs, you may have thousands of dollars in points or annual rewards accrued. Some rewards cards allow you to buy a free plane ticket every year, well others let you cash in your accrued points for a statement credit.

The more rewards the two of you have earned through credit card purchases during your marriage, the more valuable the rewards you have to split may actually be. Couples may need to reach out to their credit card companies to determine the current status of the rewards so that they can appropriately divide them in the divorce. 

Who pays the debts?

High-income couples often require more revolving credit than those with a lower household income. You could have many thousands of dollars in credit card debt shared between the two of you and even more in accounts held in just your name.

You may be on the hook for some of your spouse’s personal credit card balance, and they may be responsible for some of yours. Unless you close and pay off the accounts during the divorce process, your spouse failing to make payments on time could eventually make you the one responsible for certain debts even if the courts order your spouse to pay them.

Recognizing and addressing credit card-related challenges early in your divorce negotiations can help you avoid major conflicts later.


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