What Really Happens to Credit Card Debt When You Die? Answer Might Surprise You

Credit cards have become the norm in society as a method of payment.

We've all heard the idiom "you can't take it with you," meaning that money or personal wealth has no use after you die.

READ MORE: 21 Celebrities Who Ran Into Serious Tax Troubles

So, what happens to your credit card debt when you go? Does it vanish into thin air? Does a family member get stuck paying for that expensive jacket you charged on your AmEx? The answer might surprise you.

We have good and bad news: credit card debt doesn't die with you—but your loved ones aren't automatically responsible for it.

Who Actually Pays for the Debt?

According to Bankrate, in "most cases, it’s either paid off through the estate’s assets or becomes the responsibility of a joint account holder or cosigner."

"If an estate can’t cover the debt, the remaining debt may impact beneficiaries and, in certain cases, they could be liable for paying it," the financial site states.

What Happens If the Estate Isn’t Enough to Cover Debt?

Debt collectors may try contacting a surviving spouse or family members to recoup their losses, however, they are only allowed to communicate with you about getting money from the deceased's estate.

"It’s illegal for them to suggest you’re responsible for repaying the debt with your money," according to the Consumer Financial Protection Bureau (CFPB).

Steps to Take to Protect Your Loved Ones

Bankrate urges individuals to notify financial institutions immediately after the death of a loved one to close their account.

The financial site also suggests acquiring multiple copies of a death certificate and no longer using the credit card, even for funeral expenses.

"Continuing to use a credit card as an authorized user after the cardholder’s death is one way people, perhaps unknowingly, commit credit card fraud, and it could get you into big trouble," Bankrate writes.

Celebrities Who Died in Debt

Credit card debt can affect everyone, even celebrities. Take Lisa Marie Presley, for example.

Elvis Presley's daughter reportedly left behind more than $3 million in credit card and personal debt when she died in 2023.

Michael Jackson also died owing a jaw-dropping amount to creditors. Despite being a worldwide sensation, the King of Pop racked up an enormous amount of debt.

When Jackson died in 2009, reports stated that he was more than $500 million in debt, forcing his estate to cover the bills.

Within a few years after his death, the "Thriller" singer's estate earned more than enough to pay off creditors and leave a massive legacy to his three children: Paris, Prince and Blanket.