Credit card rewards often amount to hundreds of dollars or the equivalent in air miles, which is why overlooking them during property division in divorce proceedings can be a big financial mistake. While retirement accounts, investment accounts and real estate are the first things that come to mind when it comes to property division, credit card points can be a valuable asset that should be factored into divorce decisions.
When was the card opened?
If one spouse opened the credit card before he or she got married and can show all the points belong to them alone, that person could be its sole owner.
Points are considered martial property if they were earned while the couple got married, regardless of who earned them. Otherwise, both parties may be able to claim ownership of some, if not all the points, even if their was no joint account to begin with. Even if the card was opened under one spouse’s name but the points were collected during marriage, then the points will be owned jointly.
How can rewards be divided?
As with all other property during a divorce, credit card rewards have to be assigned a dollar value based on the date of the divorce petition. This value is then added with all the other property in the divorce.
However, the matter is often not as easy as simply transferring points to the other spouse. Terms and conditions of the credit card points dictate the way they can be divided, and many charge a fee for transferring points. Others do not allow it all. One solution may be for one party to keep the points with the other getting something of similar value.
Property division is a contentious aspect of divorce, which is why it is beneficial to have a level headed individual advocate for one’s best interests.