Nearly everyone pursues love with high hopes and stars in their eyes. But when a relationship ends, there can be a range of negative emotions – anger, sorrow, and regret.
What happens next can often be unpredictable.
That's why many personal finance experts advise quickly severing financial ties when emotional ones crash and burn.
The personal finance site Creditcards.com warns that an angry ex-partner can quickly cause a lot of financial damage if the two of you share a credit card account.
Financial horror stories
It interviewed a New York CPA who recounts some financial horror stories in the wake of a bad break-up. There is apparently something called “revenge spending,” where the dumped partner takes the credit card on a shopping spree, with the sole purpose of running up a huge bill.
If your ex is an authorized user on any of your credit cards, contact the issuer and have him or her removed as quickly as possible. If possible, avoid cancelling the card, since closing a credit account will ding your credit score
British media reported a few years back on the case of a man who exacted revenge on his estranged wife by running up a huge tab on her credit card. Strangely, he had already established a new relationship with a girlfriend, who apparently became his willing accomplice.
The man was said to be angry that his wife was vacationing with her boyfriend, and charged several thousand dollars to her card while she was away.
One way to minimize this threat is to avoid anger and emotion in the split. Also, if the partner who is leaving has been the main financial contributor, making it clear up front that some support will be provided may make it less likely that the other partner will ty to use the joint credit card as a weapon.
If it is a marriage that is ending, the courts will be involved. Still, it is important to defuse anger and a thirst for vengeance in the time before the case gets to a judge. There's a good chance both spouses will be on the hook for any revenge spending once the lawyers get involved.
By the way, a divorce is going to adversely affect both parties' credit. That's because joint credit accounts will be closed, resulting in a lowering of both credit scores.