Who Keeps Credit Card Points in a Divorce?
When couples decide to end their marriage, there are many issues to settle, including division of property, child custody, alimony, and more. In some cases, one of the most valuable assets may not be tangible; instead, it may be credit card rewards points, airline miles, or hotel points.
Many people collect these reward points over time intending to use them to travel, shop, or purchase other merchandise. But when a divorce occurs, who gets to keep these points?
Who Owns the Credit Card Points?
It's important to understand that Florida is an equitable distribution state, which means that marital property is divided fairly but not necessarily equally between spouses. Non-marital property, such as gifts or inheritances, is typically not subject to division in a divorce.
When it comes to dividing credit card points in a divorce, the distribution will depend on various factors, including:
- When the rewards points were earned. For example, if the credit card account was opened by one spouse before the marriage, then the points earned on that account may be considered separate property and will likely remain with the spouse who opened the account. However, if the account was opened jointly during the marriage, then the points earned may be considered marital property and will be divided between the spouses.
- How the rewards points were earned. If the rewards points were earned through the use of a joint credit card, they may be considered marital property. However, if the points were earned through the use of separate credit cards, they may be considered separate property.
- How the rewards points were used. If the rewards points were used for marital expenses, such as travel for both spouses, they may be considered marital property. However, if one spouse used the points for personal expenses, they may not be considered marital property.
Are Your Credit Card Points Transferrable?
Another factor that can influence the distribution of credit card points is the terms and conditions of the credit card. Some credit card companies may allow the transfer of points to another account, while others may not. In some cases, the points may have an expiration date, which will need to be taken into account when dividing the assets.
It is also important to note that not all credit card rewards are created equal. Some rewards programs may be more valuable than others, making it even more important to ensure that they are divided fairly. This can be particularly challenging if both spouses made purchases on the same card and earned points at different rates.
Dividing the Points
In some cases, couples may agree to split the rewards points as part of their divorce settlement agreement. This can be done through negotiation or mediation, with the help of attorneys or divorce professionals. If the couple cannot agree on how to divide the reward points, the court may be asked to make a decision.
When it comes to credit card points, the court will likely consider several factors in determining how to divide your marital assets, including but not limited to:
- Each party’s economic circumstances
- Each party’s contributions to the marriage
- The length of the marriage
- Whether either party has contributed to the other’s personal career or educational opportunities
- Whether either party gave up their personal career or educational opportunities
- Whether either party has wastefully dissipated assets
How Much Are Credit Card Points Worth in Divorce?
Valuating credit card points can be simple if you are involved in a cashback rewards program. However, determining the value of points can become more complicated if you receive other rewards like frequent flyer miles, dining and grocery rewards, gas credit, etc. You should work with a forensic accountant or financial professional to better determine point values.
Is It Worth It to Split Up the Points?
While splitting rewards can provide financial benefits and compensate for lost assets and funds, it is important to consider the practicality of dividing points. It is crucial to analyze the amount of points accumulated, their type, and their redemption value—including any possible fees for dividing points or transferring them to a separate account.
Ultimately, we recommend weighing the cost and benefit of splitting credit card points, depending on the specific circumstances of each case. While it may seem appealing at first, dividing rewards may not be worth the effort and expense in the long run if the accumulated points are not substantial or redeemable for valuable rewards. It is also important to keep in mind any potential tax implications and to seek out professional advice when making any major financial decision.
Discuss Your Concerns with Our Attorney
Backed by decades of legal experience, Dale L. Bernstein, Chartered Law Office is here and prepared to help clients navigate divorce-related matters, including the division of property. When you retain our services, you can trust that we will fight for you to receive a fair and equitable divorce resolution.
Reach out to our team online or via phone at (727) 312-1112 to schedule an appointment.