What Might HappenThe 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 zero 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.