clear
Sunday November 19th, 2017 7:13PM
8:34AM ( 10 hours ago ) Weather Alert

Will your store credit card survive 'retail apocalypse'?

By The Associated Press
Related Articles
  Contact Editor

Stroll your local mall and you may spot some empty storefronts where mannequins once stood draped in the latest fashions — possible casualties of what some have dubbed the "retail apocalypse."

Not everyone agrees it's all doom and gloom for brick-and-mortar stores, but challenges certainly exist. Major retailers have announced plans to close thousands of locations in the U.S., and the final tally for 2017 could number around 9,500 stores, according to projections from Fung Global Retail & Technology, an industry think tank.

But just because a store turns out its lights doesn't mean the end is also nigh for your store credit card. Its fate depends on the retailer's business plans and decisions made by the bank that issues the card. The better you understand the process, the better you can manage your credit and keep it in good standing.

WHAT MIGHT HAPPEN

The impact of a retail closure on store credit cards may vary by situation and issuer, according to David Boone, head of U.S. partnerships at TD Bank. TD Retail Card Services issues private-label credit cards, which can be used only at a particular store, as well as co-branded credit cards, which have a Visa or MasterCard logo and are widely accepted.

When a store closes, any of the following may happen regarding your store credit card:

— You have to shop online to use the card. If a store moves sales online, you can continue using your private-label store credit card on its website and making your payments online, or by phone or mail. Of course, this also means you may incur shipping costs. If your card is co-branded, it should still be accepted by most merchants.

— The card issuer offers you a new credit card. When a retailer goes out of business entirely, the rewards program eventually goes with it. "Most issuers will attempt to find a replacement product or reward value proposition for the customer," Boone says. Replacement products might include a cash-back credit card or one with a 0 percent introductory APR offer.

— The issuer closes your card. You store card may be shuttered completely along with the store. In this case, you might be notified about a rewards expiration date. Private-label credit cards are more likely to be closed because they can't be used anywhere else.

— The issuer sells your credit card account. Most banks, Boone says, would prefer to retain relationships with existing customers. But the issuer does own your debt and can therefore sell it to another issuer. If that happens, the new issuer is required by federal law to alert you to any significant changes to the terms with a 45-day advance written notice, according to Nessa Feddis, senior vice president for consumer protection and payments at the American Bankers Association.

Keep your contact information updated in case an issuer needs to notify you about changes.

POSSIBLE IMPACT ON YOUR CREDIT

Regardless of what happens to your favorite store, you must continue making payments on your card or risk damaging your credit score.

Your credit can suffer if you or the issuer close the account, but the impact depends on how long you've had the card and how much of its available credit you're using. Both are factors in popular credit-scoring models.

"If a consumer closes a card that has a lengthy credit history, or one that represents a large part of their credit utilization, closing the account can have a large negative effect on his or her credit score," said John Danaher, president of consumer interactive at TransUnion, in an email. (TransUnion is a NerdWallet business partner.)

If the card is newer or has a low credit limit, any negative impact "will likely be small and temporary," he adds.

If an issuer closes your account, check your credit report to make sure it's documented correctly.

YOUR OPTIONS

You don't have to sit around and wait for the sun to set on your store credit card; you can seek out a better match. Many credit cards with broad acceptance also offer benefits such as rewards and introductory interest-free periods.

An application for a new credit card can ding your credit score because it triggers a "hard pull" from the issuer on your credit report. But it's generally a temporary dent, and it may be worth it if you find a card that works for you.

Check your credit score in advance so you can apply for cards in your credit range and improve your odds of approval.

This article was provided to The Associated Press by the personal finance website NerdWallet. Melissa Lambarena is a writer at NerdWallet. Email: mlambarena@nerdwallet.com. Twitter: @LissaLambarena.

RELATED LINKS:

NerdWallet: What makes up your credit score?

https://nerd.me/credit-score-components

NerdWallet: What are the credit score ranges?

https://nerd.me/credit-score-range

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Industries, AP Business - Financial Services, AP Business - Personal Finance
© Copyright 2017 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
'So many babies in there': church shooting claims 8 children
'There were just so many babies in there': Texas church shooting claimed 8 children
10:19AM ( 5 minutes ago )
Will your store credit card survive 'retail apocalypse'?
If your favorite store closes, what are the implications for your store credit card?
10:13AM ( 10 minutes ago )
German gov't expects higher tax take, cautious on spending
The German government has increased its forecast for tax income over the next four years amid healthy economic growth, but the interim finance minister is cautioning that the next administration won't have unlimited room to spend more
10:09AM ( 15 minutes ago )
Associated Press (AP)
Germany expects higher tax take, cautious on spending
The German government has increased its forecast for tax income over the next four years amid healthy economic growth, but the interim finance minister is cautioning that the next administration won't have unlimited room to spend more
9:44AM ( 40 minutes ago )
UN, aid groups warn of 'starvation and death' in Yemen
The United Nations and over 20 humanitarian groups are decrying a decision by a Saudi-led military coalition to block access to airports, seaports and land crossings into Yemen
9:06AM ( 1 hour ago )
Brexit talks resume amid warnings that time is running out
The European Union's chief Brexit negotiator is warning Britain that time is running out to reach an agreement, as officials from the two sides meet for an abbreviated round of divorce talks
9:05AM ( 1 hour ago )
AP Business
Alaska signs gas pipeline project deal with China
The state of Alaska will attempt to advance a multibillion dollar natural gas pipeline project with the help of interests from China
5:05AM ( 5 hours ago )
The Latest: Tillerson: Trump-Putin talks under consideration
U.S. Secretary of State Rex Tillerson says a meeting between President Donald Trump and Russian President Vladimir Putin is "still under consideration."
3:40AM ( 6 hours ago )
China, US sign more business deals during Trump visit
China has signed business deals it said totaled $253.4 billion with American companies during President Donald Trump's visit in a tradition aimed at blunting criticism of Beijing's trade policies
1:31AM ( 8 hours ago )
AP Business - Industries
Losses for banks and smaller companies take US stocks lower
US stocks take modest losses as banks and smaller, domestically-focused companies stumble
4:41PM ( 1 day ago )
Yellen says public trust in Fed ethics is critical
Fed Chair Janet Yellen says ethical standards critically important for central bank
4:29PM ( 1 day ago )
California proposes armored cars to transport pot tax money
California's state treasurer is recommending using armored cars to transport millions of dollars in cash tax payments expected next year with the legalization of recreational marijuana
4:23PM ( 1 day ago )
AP Business - Financial Services
Senate bill to unwrap with tax cuts, end to local deduction
The Senate version of the Republicans' high-stakes tax overhaul is set to be unveiled with billions in tax cuts for people and corporations and repeal of the federal deduction for state and local taxes.
3:32AM ( 6 hours ago )
Walmart to offer Black Friday deals early on its website
Walmart plans to tempt shoppers with online deals weeks before Black Friday sale
3:15AM ( 7 hours ago )
Trump administration officials meet GOP senators on tax bill
Top administration officials have met privately with Republican lawmakers as GOP senators put finishing touches on their tax bill
8:01PM ( 14 hours ago )
AP Business - Personal Finance
'So many babies in there': church shooting claims 8 children
'There were just so many babies in there': Texas church shooting claimed 8 children
10:19AM ( 5 minutes ago )
German gov't expects higher tax take, cautious on spending
The German government has increased its forecast for tax income over the next four years amid healthy economic growth, but the interim finance minister is cautioning that the next administration won't have unlimited room to spend more
10:09AM ( 15 minutes ago )
Department stores: Macy's sales fall, Kohl's profit drops
Macy's sales fall and Kohl's reports a drop in quarterly profit, underscoring challenges for holiday season
9:59AM ( 24 minutes ago )
UK leader fills Cabinet post after 2nd resignation in a week
British Prime Minister Theresa May has named a new international development secretary to replace a Cabinet minister forced out over unauthorized meetings with Israeli officials
9:54AM ( 30 minutes ago )
Packers waive TE Martellus Bennett, ending short tenure
The Green Bay Packers have waived tight end Martellus Bennett, bringing his short tenure at Lambeau Field to a surprising end
9:51AM ( 32 minutes ago )