Credit Card Glossary: Terms and Definitions

Community property

In states with community property laws, all assets and debts obtained between spouses during marriage is equally owned. Property, excluding gifts or inheritance in some jurisdictions, is viewed as a result of a combined effort. The consequence for credit cards in community property states is that any card debt that either party racks up during a marriage becomes the property of both spouses. If there’s a death, the card debt becomes the liability of the surviving spouse. If there’s a divorce, card debts are split in equal halves. Nine states use the community property theory: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an “opt-in” community property state, in which couples can jointly decree what property is held in common. Community property is the legal alternative to equitable division, which is a theory used to divide up assets based on variables relative to each spouse and his or her situation.