Credit cards are a common feature in most people’s wallets. These little pieces of plastic do not always indicate that a person is in debt, though. Instead, Texas consumers frequently open credit cards in order to earn reward points. While this is a useful approach, few people realize that those credit card reward points will have to be divided during a divorce.
It is not uncommon for married people to maintain their own credit card accounts separate from their spouses. However, if reward points were earned during the course of the marriage, it generally does not matter whose account they were earned on — those points are marital property. There are exceptions, of course. Couples with prenuptial agreements might have already addressed this topic beforehand. Additionally, any reward points earned before getting married are usually still the separate property of the person who opened the account.
Like with any other type of asset, individuals need to determine the value of their credit card reward points before dividing them. Since reward points rarely have a straight cash value, this can take some time to figure out. People should also be sure to read up on their credit card companies’ policies regarding transferring reward points. Some companies allow points to be transferred freely between accounts while others charge a fee. Some disallow the practice altogether.
Sometimes transferring around credit card reward points is not worth it or even totally possible. This is where understanding the cash value can come in handy. One person might be willing to let go of the reward points in exchange for a different asset of roughly equal value. These types of compromises and negotiations are common during divorce and property division, so it is helpful for Texas divorcees to fully understand their property, financial standing and more.