Probate Code 4401 and Credit Cards
This question comes up a lot: “Can I sign credit card transactions with power of attorney for finance?” The short answer in California is “Sort of.” A power of attorney is required to sign using someone else’s credit card BUT… it isn’t as simple as signing someone else’s name. Let’s walk through the law and use a simple hypothetical.
The Basics of Power of Attorney Law
First, the person giving the power of attorney, called the principal, signs a document. This document, called a power of attorney (POA), gives power to someone else to do business for the principal. Note: This power can only be given – nobody can simply get power of attorney over a principal. The person receiving the power is called an attorney-in-fact or, agent. The agent’s power takes effect either immediately or after some event. The POA can grant general or specific powers. The California default form, called a “statutory form power of attorney,” is used to grant (among other things) banking transaction power. You can get one for free by entering just your name and email on our website. Visit our main menu, click the “Downloads” section, then “Durable Power of Attorney PDF,” and follow the instructions. *Main Page
Typical Power of Attorney Credit Card Signature Fact Pattern
Priscilla Principal asks Agnes Agent to be her agent because Priscilla will be in the hospital for a month and needs some help with finances. She tells Agnes that she’ll be able to help Priscilla sign credit card transactions with power of attorney documents. Priscilla signs and notarizes a POA that is effective immediately. The POA document says that Agnes can do Priscilla’s banking, so, Priscilla gives Agnes her POA and credit card. Because of her long stay at the hospital, Priscilla sends Agnes with her credit card to the bookstore to buy some reading material for her.
Agnes arrives at the book store, grabs the books and magazines Priscilla wanted, and walks up to the counter. Then, Agnes takes out the credit card. Priscilla wrote “See I.D.” on the signature line of her credit card, so, the clerk asks for Agnes’ ID. Checking the ID and credit card, the clerk sees different names. Because of this, the clerk wants to stop the transaction. Agnes pulls out the power of attorney authorizing banking transactions and tells the clerk that she is allowed to sign a credit card transaction…
Law of Power of Attorney – Banking
California Probate Code Section 4455 states that a POA granting banking authority allows the agent to open accounts, withdraw money, and apply for and receive a credit card. However, the law does NOT grant the agent the power to sign credit card transactions with power of attorney documents.
The clerk, citing a credit card policy, thinks something is fishy and stops the transaction. Agnes Agent, scratching her head, leaves the store empty handed.
How to Sign Credit Card Transactions with Power of Attorney Documents
A power of attorney document is not permission to use someone else’s signature. But notice that the law DOES give permission to “apply for and receive letters of credit, credit cards, and traveler’s checks from a financial institution….” (Cal. Prob. C. Sec. 4455(k). This means that Agnes can take the power of attorney and Priscilla’s account/personal information to the bank.
At the bank, Agnes asks for an “authorized user” credit card under Priscilla’s account issued with Agnes’ name. The bank reviews the POA document, finds the clause in the document granting banking authority, and begins the process to make Agnes a card. The card is for Priscilla’s account – but it has Agnes’ name on it. The process can take a little time, so this step should be planned in advance. Also, most banks request that the agent scan and send the documents to the bank’s legal department for validation and processing.
With her own authorized user card in hand, Agnes can go to a store, present the credit card and Agnes’ ID, and make purchases using Priscilla’s credit.
Contact Us for Answers to Your Power of Attorney Document Questions
In short, you can’t really sign credit card transactions under someone else’s account using power of attorney documents. But you can have a card issued in your name under the principal’s account if you have the authority and the principal’s information.
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