store closing

Favorite Store Closing? What to do as a Retail Credit Card Holder

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4 Questions to Consider When a Company Goes Bankrupt

With more than 1 million retail establishments across America, the U.S. is a land of shopportunity. For some brands, however, the shutdown of commerce across the country due to the COVID-19 pandemic has led to significant challenges. In fact, some retailers may not be able to resume operations as local governments re-start their economies.

You may have concerns about what happens when a company goes bankrupt, especially if you have one of the retailer’s branded credit cards. As a primary card holder, you may have options and obligations.

Is the retailer moving sales online?

First, check to see if the retailer plans to continue sales online, even if they’re closing their physical locations. In that case, your retail credit card can remain a preferred payment option while you continue to enjoy shopping at your favorite brand.

Is your card a co-branded card?

If you aren’t sure, look at the credit card itself. Does your card display the logo of a major payment network, such as Visa® or Mastercard®, in addition to the logo of the retailer? If so, the store credit card can also be used outside of the retailer’s stores. You won’t earn rewards at the retailer for outside purchases, but you might receive other perks for using the retail credit card.

Do you have unredeemed rewards?

Check with the retailer to find out how long you have to redeem any unused rewards, since rewards may have no value after the retailer closes. If a retailer has any related brands, they may allow you to use rewards for a certain period at their sister brands.

Are your payments up-to-date?

Aside from those options, your most important obligation is to continue paying any remaining charges on your store credit card account or work toward paying off the balance. Typically, retail credit cards are issued through a partnership with a finance or credit company—such as Comenity—so any debt is still owed to the bank even if the company goes bankrupt.

There are two primary reasons to pay attention to your retail credit card balance. First, interest and fees will continue to accrue, so regular payments will help you manage those costs. Second, maintaining your payments helps maintain a solid credit score, which is important when you apply for credit, loans or other financial products in the future.

Is your store credit card account closing?

If the credit card company is planning to close your account after the balance is fully paid and you don’t have other credit cards, it’s a good idea to look for a replacement card so you can continue to build good credit habits and maintain a credit history. Be sure to watch your credit utilization across your active credit cards. Ideally, you should keep the balance on your cards no higher than 30 percent of your available credit to maintain a favorable credit score.

As the retail industry emerges from the challenges caused by the COVID-19 pandemic, take heart if your favorite brand is squeezed from the retail landscape. Historically, for every company that closes a store more than five new stores open, so there will always be opportunities to find a favorite brand and use your credit wisely.


Have more questions about maintaining your financial wellbeing during times of uncertainty? Explore Comenity’s other financial resources for insights to strengthen your financial health.

This page and the information contained herein is for educational purposes only. The information is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any product, service or strategy to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any links to other websites are included for your convenience only. Comenity does not endorse any product or service, and is not responsible for the accuracy or reliability of the information made available through such sites.