Since store cards tend to come with high APRs, you should strive to pay off closed store card balances as quickly as possible. You will continue to receive billing statements from the card issuer and you’ll have to repay all the amounts you owe on your card. Unfortunately, a store closure doesn’t let you off the hook from repaying your debt. Your Credit Card Balance Will Not Disappear However, if you’re worried your card’s store will soon cease to exist, you should head to a local store or get on the website to spend any rewards you currently have. Penney stores are still open and the company website is fully operational. Penney has a store card, the JCPenney Credit Card * and its own rewards program, yet this retail giant filed for bankruptcy protection on May 15, 2020. Because of this, if you receive notice of or anticipate an impending closure, you should attempt to spend any and all rewards while the store is still open.įor example, J.C. If you were earning rewards associated with a store when you used your store card, those rewards will go poof right along with the store itself. Doing this will help keep your credit utilization rate down. If your card is open-loop, it may be worth contacting the issuing bank to see if they will move your available credit to another card in their portfolio. Ideally, you’ll keep your credit utilization below 30%, so you should strive to pay down debt below that amount if you can. If you have revolving debt on other cards, your credit utilization will suddenly go up. If your store card closes, your total available credit then goes down to $8,000. This is due to the fact that your credit utilization will go up due to the card closure and the fact that you no longer have any available credit on this account.Īs an example, let’s say that you have several credit cards with an overall total limit of $10,000 and your store card had a limit of $2,000. The account closure may not matter to you if you do not have any revolving debt but you may see an impact to your credit score if you do. You will receive a notice from the store or card issuer that lets you know when the closure is final, which can give you time to plan. In that case, your account will likely be closed, which makes sense since the card could only be used at that specific retailer anyway. However, if the store the card is associated with goes out of business altogether, that’s another story. If a retailer closes only some of its locations but keeps others open (or if it maintains an online presence) it’s possible nothing will change with your store card. While some store credit cards are truly “ closed-loop” that can only be used within a single store (or family of stores), others may be offered through major issuers like American Express or Visa. What Happens to Your Store Credit Card Your Account May Close
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