Divorce is a challenging process that involves the division of various assets, including credit card points. Understanding who owns these points, how they can be divided, and their worth can help you navigate this complex situation. At O1ne Mortgage, we are here to assist you with your mortgage needs during this difficult time. Call us at 213-732-3074 for expert advice and support.

Who Owns Credit Card Points?

State laws can vary, but generally, credit card points accumulated during your marriage are considered marital assets owned by both spouses. This applies to both joint and individual accounts, regardless of whether spouses are listed as authorized users. In a divorce, marital property is divided based on your state’s laws.

If you had a rewards card before getting married and earned points while you were single, those points might qualify as a separate asset you can keep. However, it’s essential to consult with a family law attorney to understand what qualifies as a separate asset in your state.

Can You Divide Credit Card Points?

Dividing credit card points can be complicated. Some programs allow you to transfer points between accounts, while others do not. Additionally, some rewards programs charge a fee for transferring points or miles. The best way to determine your options is to contact your rewards program directly.

Often, credit card accounts are part of a larger discussion about who is responsible for debts after divorce. You may decide to close joint credit card accounts, remove each other as authorized users, and keep your respective individual cards with rewards points attached. If transferring points to your ex-partner isn’t possible or practical, consider these alternatives:

• Offer cash: Assign a cash value to your rewards points and offer your ex half.
• Trade an asset: Offer a different marital asset worth a similar amount, such as $2,500 in additional home equity in exchange for 250,000 rewards points.
• Redeem and split: If your card company allows it, redeem travel points for a plane ticket or other reward in your ex’s name using their share of rewards points. You can also redeem your ex’s half of any cash back rewards and give them the money.

Working with a family law attorney can help you find fair ways to account for rewards points and other assets, even when a literal division of points isn’t feasible.

How Much Are Credit Card Points Worth?

Credit card rewards points are typically worth about a penny each in most rewards programs, though the value can vary depending on the card program and your redemption options. To verify this, compare the estimated value of a reward to the points required to redeem it. For example, a hotel stay worth $250 should equate to roughly 25,000 points.

If your card offers cash back rewards, calculating your points’ value is straightforward: $5,000 in available cash back rewards are worth $5,000, minus any applicable redemption fees.

The Bottom Line

Valuing and dividing credit card rewards points can be challenging when splitting assets and managing credit during a divorce. However, with some flexibility, it’s possible to find an arrangement that works. This might involve literally splitting points or compensating each other with cash or other marital assets to even things out.

While you’re dividing credit card accounts and their attached rewards, be mindful of your credit. Regularly checking your credit score and report can help ensure things run smoothly, with no missed payments or mystery balances that might indicate a glitch in your division of accounts.

At O1ne Mortgage, we understand that divorce can be a stressful time. Our team is here to assist you with your mortgage needs, providing expert advice and support. Call us at 213-732-3074 to learn more about how we can help you navigate this challenging period.