Credit Card Update: In today’s time, credit cards have become a daily necessity for people. They make shopping, traveling, and online payments easy. Credit cards also offer reward points, cashback, and various offers that are often not available with debit cards. The biggest advantage is that you can spend now and pay later. However, many people wonder what happens to the outstanding amount if the credit card holder dies before making the payment, and who will pay the money.

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What happens to the credit card bill after death?

If a credit card holder dies for any reason, the bank recovers the outstanding amount from the assets, investments, or other properties in the deceased’s name. In this situation, family members are not held personally responsible, as the credit card debt is solely the responsibility of the cardholder.

If the value of the assets or investments in the deceased’s name is less than the outstanding amount, the bank considers the remaining amount as a bad debt or non-performing asset (NPA). This means that the family is not pressured to make any additional payments. Now, let’s understand how banks determine credit card limits.

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How is the credit card limit determined?

Banks or financial institutions assess several factors before determining the credit card limit. First, your monthly income and job stability are considered. They check whether your income is regular and what kind of profession you are in.

In addition, the bank also checks your credit score. The credit score indicates whether you have paid off previously taken loans or credit cards on time. If your credit score is good, the bank is more confident in giving you a higher credit limit.

Along with this, the bank also looks at your spending habits. If you spend responsibly and pay your bills on time, the chances of your credit limit increasing are also higher.