Does the family have to pay the credit card bill after the cardholder's death? RBI Rules Explained

In today’s fast-paced digital world, credit cards have become an essential financial tool. From online shopping and bill payments to travel bookings and emergency expenses, millions of Indians rely on credit cards for everyday transactions. However, credit cards also come with responsibilities. If dues are not paid on time, banks charge heavy interest and penalties. This leads to a very important question—what happens if a credit card holder passes away while an outstanding bill is still pending? Are family members legally required to repay that amount?

Let’s understand the answer clearly with the help of RBI guidelines and banking rules.

Is the Family Liable for Credit Card Dues After Death?

First and foremost, it is important to know that a credit card is an unsecured loan. This means no asset or property is pledged as collateral while issuing the card. Banks approve credit cards based on an individual’s income, repayment capacity, and credit score.

According to Reserve Bank of India (RBI) regulations, the legal responsibility of repaying credit card dues lies only with the cardholder. After the death of the credit card holder, the bank cannot force family members or legal heirs to repay the outstanding amount from their personal income or savings.

So, if you are a spouse, child, or relative, you are not personally liable for the deceased person’s credit card bill.

Can Banks Recover Money from the Deceased Person’s Assets?

Yes, banks are allowed to recover the outstanding credit card dues from the assets left behind by the deceased. These may include:

• Bank account balances

• Fixed deposits (FDs)

• Mutual funds and shares

• Gold or other valuables

• Property or real estate

Legally, banks have the right to claim their dues before the assets are distributed to the heirs.

What If the Outstanding Amount Is More Than the Assets?

In such cases, banks can recover only up to the value of the inherited assets.

Example:
If the deceased left assets worth ₹5 lakh and the credit card dues are ₹7 lakh, the bank can recover only ₹5 lakh. The remaining ₹2 lakh is written off as a loss by the bank.

If there are no assets at all, the bank has no legal way to recover the amount. The unpaid dues are then classified as bad debt or NPA.

Special Situations Where Rules Change

Some scenarios require extra attention:

• Joint Credit Card:
  If the credit card is jointly held, the surviving cardholder must pay the full outstanding amount.

• Guarantor Involved:
  If someone acted as a guarantor, the bank can legally recover the dues from the guarantor.

• Credit Life Insurance:
  Some premium credit cards include credit life insurance. In case of accidental death, the insurance company may settle the outstanding amount within policy limits.

What Should Family Members Do Immediately?

• Inform the bank about the cardholder’s death

• Submit a copy of the death certificate

• Request immediate card blocking

• Ask for a written statement of outstanding dues

• Avoid paying from personal funds unless legally required

If a recovery agent harasses or pressures the family, they can file a police complaint or approach the RBI Banking Ombudsman.

Conclusion

RBI rules clearly protect families from unfair financial pressure after the death of a credit card holder. While banks can recover dues from the deceased’s assets, they cannot force family members to pay from their own money. Knowing these rules helps families make informed decisions and avoid unnecessary stress during difficult times.