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Dividing Credit Card Points in a Divorce

Divorce can be a complex process, and one of the many aspects to consider is how to handle credit card points. These points, accumulated during the marriage, are often considered marital assets and need to be divided between spouses. Understanding the ownership, division, and value of these points can help you reach a fair agreement.

Who Owns Credit Card Points?

Generally, credit card points earned during a marriage are considered marital assets, regardless of whose name is on the card. This applies to both joint and individual accounts. In a divorce, these points are divided according to state laws governing marital property.

Points Earned While Single

If you earned points on a rewards card before getting married, those points might be considered separate assets. It’s best to consult with a family law attorney to understand how your state classifies these points.

Can You Divide Credit Card Points?

Dividing credit card points can be tricky. Some rewards programs allow point transfers between accounts, often for a fee, while others do not. Contact your rewards program to explore your options. Here are a few alternatives if transferring points isn’t feasible:

• Offer Cash: Assign a cash value to the points and offer your ex-spouse half.
• Trade an Asset: Exchange a different marital asset of similar value, such as additional home equity.
• Redeem and Split: Redeem points for rewards in your ex’s name or split cash back rewards.

Working with a family law attorney can help you navigate these options and ensure a fair division of assets.

How Much Are Credit Card Points Worth?

Credit card points are typically worth about a penny each, though this can vary by program. To determine the value, compare the estimated value of a reward to the points needed to redeem it. For example, a $250 hotel stay should require around 25,000 points. For cash back rewards, the value is straightforward: $5,000 in rewards equals $5,000, minus any redemption fees.

The Bottom Line

Dividing credit card points during a divorce can be challenging, but with flexibility, you can find a workable solution. Whether you split the points directly or compensate with cash or other assets, it’s important to reach an agreement that both parties can accept. Additionally, keep an eye on your credit score and report to ensure a smooth transition.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team is here to assist you with expert advice and support.

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