Chloe Ruins Credit of Daughter With American Express


“Dear Steve,

My daughter opened an AMEX card for me since my credit is fair. She got me a card in my name off of her account to be used for emergencies For the first 8 months of the card I was able to pay the bill however in mid July I came upon financial hardship and wasn’t able to pay.

I was using the card for everyday use and not emergencies and my daughter wasn’t aware of it since I was the account manager on the card and my bank account was connected to the card and paying all of the bills.

My daughter used the card maybe once or twice.

To make a long story short I can’t pay the bill and it’s now over 120 days in arrears. This bill is $38,000 now with all the interest it’s accrued. AMEX will not deal with me at all. I’ve asked them for a payment plan to get this paid off however all they offered was a plan that I have to pay $2930 per month for 12 months and I can’t afford that! I asked them to allow me to pay $700 – $1000 per month with a balloon payment in August (when I expect to get a bonus from my job) but they wouldn’t do that either.

They said if we don’t pay the first payment by next Friday that it will be turned over to a collection agency.

I have ruined my daughters good credit. She’s only 25 and was going to buy a house in the next few months and now she won’t be able to. I’ve also asked AMEX to put the liability in my name and make me responsible for the bill since my daughter didn’t know anything about this but they won’t do that either.

Any suggestions?? I’ve looked into debt companies but I’m afraid they may be scams.

Help please!!


Dear Chloe,

The damage is now done and hopefully you’ve learned some very valuable lessons. No sense wasting a perfectly good failure, I always say.

Sadly, this is not the first time I’ve seen a situation like this, and I’m sure it won’t be the last either.

When you daughter agreed to let you be an authorized user of her account she gave you the opportunity to ruin or damage her credit. And for everyone that may have allowed someone to be an authorized user on a credit account, check the balance and/or check your credit report to see what the current status of the account is. You don’t need a surprise like Chloe’s daughter got.

Before you leap to anything like credit counseling or debt management, which your daughter would have to enroll in since this is her card, not yours, I’d suggest waiting and letting the card go to collections.

Once it gets to the collection company they may accept your offer to repay $1,000 a month. But even $1,000 isn’t going to clear this balance in less than four or five years. This might be a good account to consider doing a debt settlement on. If you work with a reputable debt settlement company there is a chance that you could get 30% knocked off the balance and get this resolved in just a couple of years. Try contacting this debt settlement company and see what they feel is possible.

For my regular readers you may notice that while I am sometimes critical of debt settlement companies, this is a good example when a debt settlement approach might be a good option. The only unfortunate situation here is that it is an AMEX account. Never an easy creditor.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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