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Are credit card reward points marital property in divorce?

On Behalf of | Dec 13, 2023 | property division |

Filing a petition to end a marriage in Minnesota triggers a series of events that, at some point, must include negotiating a settlement. If you have children, their needs and best interests will undoubtedly be a central focus of the proceedings, as they should be. Another top priority, however, is asset division. Spouses filing for divorce in 2023 may face numerous issues that did not exist long ago. For example, are reward points on a credit card a marital asset?

Before the invention of the credit card, which occurred in the 1940s, asset division in a divorce was less complex. Today, there are numerous credit card companies that offer their customers reward points for purchases. You may redeem these points for products or cash, which technically makes them an asset.

Marital versus separate property in divorce

If you purchased a credit card before marrying your spouse and earned 100% of the reward points on the card before you said “I do,” then you might be able to claim it as a separately owned asset in your divorce. Even if you purchased the card as a single person, however, if you earned rewards on it while you were married, then your spouse may have a right to a portion of the assets. Any points accrued during marriage become marital property.

What is the value of reward points on a credit card?

It is not enough to know that you might have a right to a particular asset in your divorce. The court must know the value of all your marital property before determining how to divide it between both spouses. The court must assign all assets a value. Think of it this way: You can’t split a vehicle in two; however, you can determine how much the vehicle is worth, then divide the value.

Similarly, you must obtain a valuation of your credit card points to divide them as assets in a divorce. Determining the value of credit card reward points can be tricky. One way to do it is to assign value based on the conversion value of the points. For example, if you must have 10,000 to get $100 or make a $100 purchase, then your points are each worth one cent. If you have 100,000 when you divorce, the value of the points is $1,000.

Can you transfer reward points to your ex’s account?

Only some credit card companies allow you to transfer reward points to other people. If yours does, then there might be a way to transfer your ex’s portion of the assets to his or her account as part of property division proceedings. Some companies charge a fee for transfers.

These issues may also be relevant in a divorce for people who have earned frequent flyer miles or other rewards in an airline program. If you’re unsure whether an asset is marital property or whether you can trade it for another asset, it’s best to seek counsel rather than trying to resolve the issue on your own.