With a rising number of retail stores closing their doors, consumers might also be affected when it comes to their store credit cards.
From bank notices to phone calls, some consumers might be receiving requests for additional information regarding their store credit cards even though the retailer has been shut down for a while. For some people, this could be a red flag for potential identity theft or more. For others, it could mean the account is still open.
A consumer had been contacted by Ohio-based Comenity Bank, requesting her complete Social Security number so it could keep her store account active—even though the retailer had been closed for almost 20 years, ClickOrlando reported.
What’s a consumer to do? First, it’s important to contact the bank directly so it can help resolve any notices and requests. This can also help confirm whether the account is still open.
Paying Off Balances
Not everyone will be so lucky when a store closes its doors; consumers are still responsible for paying off store credit card balances. Remember, stores typically aren’t the credit card issuers, but a bank or a private label company underwrites the loans. Consumers should pay off card balances as soon as possible to avoid delinquency fees. Failing to pay the balance could damage one’s credit.
Another potential scenario is the underwriting bank may sell the card account to another retailer. Consumers need to watch for this. Rod Griffin, director of public education for the credit bureau Experian, told the Associated Press, “If the account is sold or transferred to another company, two things would likely happen in your credit report. First, the original debt would probably be updated to show ‘closed’ and that it has been sold or transferred to the new company. Second, the debt would appear under the new company’s name, usually with a notation specifying from whom it was purchased or transferred.”
To be proactive regarding credit cards with closed stores, experts recommend the following tips.
Check credit report and accounts: Monitoring credit reports can ensure thieves haven’t opened up accounts. The three credit reporting agencies are Equifax, Experian, and TransUnion.
Obtain a free credit report: Free credit reports can be obtained through AnnualCreditReport.com as one source. Consumers should check if an issuer has closed their account by looking for a “closed” or “closed at lender’s request” on the report. When an issuer closes a store card, its impact on credit scores is less than if the consumer closes the account.
Seek credit counseling: If problems have occurred regarding unpaid debt, a credit counselor might be able to help you negotiate a more affordable monthly payment.
Author: Andrew Rombach
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