Canceling a Family Member's Credit Card

Does any have experience on if/how to cancel the credit card of a family member who is not financially responsible?

I have a close family member with mental health issues who can not be trusted with their own finances (not callous, but ill). I got asked to help them out financially, was given access to their online banking, and discovered they have a credit card the rest of the family didn't know about. Apparently, it's being kept maxed out with a 22% APR, and when the credit limit got raised, they immediately went on a shopping spree.

Other family members and I are considering pooling together to pay off the debt in a lump sum... but only if the card gets cancelled immediately after. We can not trust them to cancel on their own. Need to figure out how to do this.

I think you'll need a power of attorney to do something like that.

What I'm wondering is something like, since I have access to their online banking, if I can close it through that as soon as it's payed off.

Or maybe a 3-way call with them and the bank's customer service. That way I know it's being done.

If the account is not in your name, or POA your powerless. IMHO. An intervention may be necessary.

Beer Baron wrote: What I'm wondering is something like, since I have access to their online banking, if I can close it through that as soon as it's payed off. Or maybe a 3-way call with them and the bank's customer service. That way I know it's being done.

Problem with that is, as long as you don't have a POA, they can just open another card.

I work in financial services and had a stint a long time ago in customer service. A POA is pretty much standard requirement. Even with online access I don't believe you'll be able to close an account, especially with a high balance. Extreme case- report the card as stolen. The card they currently have will be closed. It'll buy you time to have a conversation and try to reason with them and figure out next steps.

Have then declare bankruptcy. That pretty much solves the credit issue for the near term.

If you pay it off and cancel, they will just get a new card of some sort in the mail.

Is it their money?

Have they been diagnosed as medically unfit?

Who has legal guardianship?

If it is their money and they are competent to make a decision, I am afraid you don't get to make it for them, even if it means they spend all their money.

If they are unfit, then a legal guardian or POA should be able to make financial decisions.

Is taking the card away good enough?

eastsidemav wrote:

Beer Baron wrote: What I'm wondering is something like, since I have access to their online banking, if I can close it through that as soon as it's payed off. Or maybe a 3-way call with them and the bank's customer service. That way I know it's being done.

Problem with that is, as long as you don't have a POA, they can just open another card.

and even IF you have POA, unless you're going to monitor all their incoming mail and all their computer time, you're not going to be able to stop them from getting a new CC …

good luck … y'all have a tough road ahead of you

Because of this person's history with mental illness, I'm going to discuss with other family members convincing this person to agree to giving one of us conservatorship over their finances. This is something that really needed to be done years ago.

Morally questionable method: call in to the bank/credit card company and figure out what their verification methods are. Find that info on your relative. Call in impersonating them and have it cancelled.

Of course while it may be morally the right thing to do IF they don't listen to your intervention or whatever you decide to do, it is also highly illegal and could potentially land you with a roommate in a sparse room with bad food three times a day.

Datsun1500 wrote: Until a court says they can't be responsible for themselves and appoints a guardian, there's nothing you can legally do. Do they think they need help?

Yes. And this is the direction we are going to move in to help them.

This person is bi-polar. The pattern is that, when they enter a manic phase, they start going on crazy spending sprees. When it progresses to the depressive phase, they get paranoid and wipe out any sort of savings or investments.

When stable, they're okay and don't need to be watched too closely. But when they revert to an episode things go to E36 M3 quickly, and no one in the family has the power to enforce them to get the medical attention they need or to protect them from wiping out their finances.

Hopefully we can use "We'll pay off your credit card debt if you grant conservatorship to one of us," as a bargaining tool so that we also have the power to force them to get medical help if they have another episode.

It's not a 100% solution - they can still apply for a card behind our backs - but it would provide us at least some direct legal power to help.

My wife and myself are the legal guardians of our youngest son who is 19 and severely disabled. The process, in our case, to have him declared incompetent and us appointed as his guardians was not that complicated, but in our case it is a clear cut, no questions case of him requiring guardians. I would think that in your situation, unless the person in question agrees to whole scheme and is willing to declare themselves incompetent, then it may be a harder process. I'd also guess, that different states have different laws when it comes to this sort of thing. Good luck. This is not an easy or pleasant process for your family to go through.

In reply to T.J.:

The plan is not to force the issue, but to get this person to agree to it.

Guardianship is not quite what you're after here. What you want is a conservatorship. Guardianship is power over their person, conservatorship is power over their finances. Guardianship might not be a bad idea either, depending on how far the person swings when they have an episode.

Power of attorney is great and will let you do what you're wanting to do as long as it stays in effect, but it's generally revocable by the grantor at any point...and anyone in a manic episode is going to do that because they're going to think they're not just fine, but the most financially responsible person in the world.

However, if you can catch them at a stable moment, you could quite possibly get them to consent to a conservatorship, which will be cheaper than fighting, faster than fighting, and spares a lot of hurt feelings. I'm sure if you've had a family member who's been bipolar for a long time, you know how best to approach them. Look for a lawyer who specializes in probate law (for arcane reasons, guardianships and conservatorships are tied in to the same courts that handle wills and estates) and go for a consultation. THey may or may not want you to bring along the family member in question.

One thing to consider is that a conservatorship requires the conservator to keep good records and file annual reports of where the money is going. How meticulous these records and reports have to be depends on the jurisdiction. If neither you or any other family members feel up to the task, you can ask the court to appoint the public administrator of your county as their conservator, and they will charge a monthly fee based on their income.

Oh, and the suggestion to have the family member file bankruptcy is worth looking at, depending on how deep the debt hole is and what their assets are.

psteav wrote: Oh, and the suggestion to have the family member file bankruptcy is worth looking at, depending on how deep the debt hole is and what their assets are.

We did this with a family member who lives on a disability pension. He has a source of income sufficient to live on. However he kept getting credit cards and using them irresponsibly. Being tired of always bailing him out (never huge sums, but repeating pattern) the family made the last bailout contingent on a bankruptcy filling.

Actually the bankruptcy filing WAS the bailout since they paid whatever cost were involved to get that done. Problem solved.

I doubt that he would have accepted a solution that took control of his finances or questioned his mental health.

The bankruptcy will only clean up past mistakes, unfortunately. It can't prevent future irresponsible behavior. And believe it or not, it won't prevent him from being able to get credit at ridiculous interest rates.

The debt (that we know of) is only $4,500. Split a couple ways, that's a reasonable price for leverage to get this person to willingly hand over the control that we need to be sure they're taken care of when they have future episodes.

When my father died my parents had something like 10 credit cards in their names. It was pretty interesting going through them all and closing the accounts. I think two required POA's or death certificates. The others simply were done over the phone or by the internet. If you can answer the questions of "What is your SS number?" and "What is your (their) mother's maiden name?" you can usually pretend your way to being the cardholder and closing them easily. One card in particular made a big deal about my mother being on the phone with me to close it and all she did was agree she was the named person on the card...my wife could have played the role and they would not have questioned it. Honestly, I found most of it absurd. You may be able to close most of them with these simple ploys.

Family member has agreed to handing over control of finances to someone else in the family who does not have their issues.

Now, I need to figure out what needs to be filled out to assign conservatorship and what that will require of us.

This might sound like a good time to consult someone who deals with this type of situation from a legal perspective..