Who Gets the Credit Card Rewards If You Get Divorced?

Getting divorced is a difficult process, and there are many aspects to consider such as child custody, property division, and asset distribution. One aspect that is often overlooked is what happens to credit card rewards when a couple gets divorced. It may not seem like a big deal compared to other concerns, but it's something that should be addressed to avoid potential conflicts down the road.

So, who gets the credit card rewards if you get divorced? The answer is not straightforward and depends on several factors. In this blog post, we'll delve into the intricacies of credit card reward distribution during a divorce.

What Are Credit Card Points/Rewards?

Credit card points or rewards are incentives that can be earned through cash back, rewards, or loyalty programs. Credit card points are typically accumulated in the form of points, cash back, or airline miles and can be used to redeem rewards such as:

  • gift cards,
  • travel vouchers,
  • tickets for exclusive events,
  • donations to local charities,
  • cash with online retailers,
  • discounts on purchases,
  • and more (depending on your specific credit card reward program).

With the right credit card, you can maximize your spending and get the most out of your everyday expenses. There are a variety of credit cards available with different rewards programs so it's important to research which one is best for you. You should also ask your credit card company whether they have different reward programs. Discover Card, for instance, offers both cash back and travel miles incentives.

New York Is an Equitable Distribution State

Equitable distribution is a method of dividing property between spouses in New York divorces. Under this system, the court will divide marital property in a way that it deems to be fair and equitable for both parties. The goal of equitable distribution is to ensure that both parties are treated fairly and equitably when it comes to dividing their marital assets.

According to NY Domestic Relations § 236 (B)(5)(d), the court will consider a host of factors when determining how to equitably divide assets, including:

  • Alimony awards
  • Each party’s separate assets
  • The age and health of each party
  • The duration of the marriage
  • The income of each party
  • The need for either party to maintain ownership of their marital home as the custodial parent
  • The tax consequences to each party (because of the property division and divorce process)
  • Whether either party has committed acts of domestic violence against the other party (with consideration to the nature, extent, duration, and impact of such acts)
  • Whether either party has wastefully dissipated assets
  • Whether either party will lose health insurance coverage once their divorce is finalized
  • Whether either party will lose their pension or inheritance once their divorce is finalized
  • Any other relevant factors

It is also important to note that couples can opt to negotiate the terms of their property division (and other divorce-related matters) themselves. If you file uncontested or use alternative dispute resolution methods (i.e. mediation, collaborative divorce, etc.), you can have more control over the division of assets, including your credit card rewards, rather than having to leave the determination up to the court.

Handling Credit Card Rewards in a Divorce

The first thing to consider is whether the credit card rewards are classified as separate property or marital property. Generally, separate property is anything that was acquired before the marriage or inherited during the marriage.

Marital property, on the other hand, includes assets that were acquired during the marriage. If the credit card rewards are earned on a credit card that was opened before the marriage or earned through separate funds, then they are considered separate property and not subject to division during a divorce. However, if the credit card rewards were earned on a credit card that was opened during the marriage using marital funds, then they are considered marital property and subject to division during the divorce.

Another factor to consider is whether the credit card rewards are redeemable for cash or other monetary value. If the rewards are redeemable for cash, then they may be considered income and subject to spousal support or child support payments. For example, if one spouse earns a substantial amount of credit card rewards and the other spouse is awarded primary custody of the children, the spouse with custody may be entitled to a portion of the credit card rewards as child support.

Many couples consider splitting credit card points, but it's important to note that credit card companies may have their own policies regarding reward distribution during a divorce. Some companies may allow the rewards to be split between the spouses, while others may require that the rewards be redeemed in full by one spouse. It's important to review the terms and conditions of each credit card to determine how rewards will be handled during a divorce.

There are a few steps you can take to ensure that credit card rewards are handled appropriately during a divorce. First, make sure to disclose all credit cards and rewards earned during the marriage during the property division process.

Then, determine whether the credit card rewards are separate or marital property. Finally, review the terms and conditions of each credit card to determine how rewards will be handled during a divorce.

The Law Office of Dennis R. Vetrano, Jr., LLC is prepared to help you understand your legal rights and options concerning property division and divorce. Call (845) 605-4330 to schedule a consultation today.

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