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One reason that store cards may not be as gentle and kind as they once were is that cards issued directly by the merchant are being replaced by cards bearing the store’s name, but actually issued by, say, XYZ National Bank. One of the most important reasons for the change is that under federal banking law, a store that issues its own card directly can be subject to strict state consumer protection laws regulating things such as interest rates and late fees. But a bank in another state, issuing a card that looks just like the old store card, right down to the trade marked store name on it, can ignore those pesky state laws. This practice boosts the store’s profit margins as it costs you higher interest and late fees. The name for this latest trend in store cards is “dualing”. A dual card has dual functions. Bloomingdale’s is in big letters at the top of the card, but Premier Visa is written in smaller letters and the card bears a Visa logo. If you use it at Bloomingdale’s, the next month you’ll get a bill from Bloomingdale’s, and Bloomingdale’s can track your purchase information and send you a pillow solicitation after you buy a bed and two sets of those lovely flannel sheets with the zebra stripes they sell. If you use it to buy a ticket to New York at the South west Airlines ticket counter, Bloomingdale’s doesn’t find out about your ticket, and the bill arrives in a separate envelope from FDS National Bank, located in Mason, Ohio. A dual card is both a store card and a bank card. As Bloomingdale’s puts it: Your Bloomingdale’s Premier Visa is more powerful than other store cards because it is a Bloomingdale’s Card with the added benefits of a Visa Card • Two separate credit lines, one at Bloomingdale’s and one with Visa • Two separate statements, one for each card account • Worldwide acceptance of Visa. Use of the dual store/bank card means you are no longer covered by your state’s consumer protection laws on such things as overlimit fees and bounced check charges. The dual card generally has a credit limit much higher than that of a store card, and this may adversely affect your ability to get other credit, such as a home mortgage, by showing up as a high potential loan on your credit report. Dual type cards are not necessarily bad, but when you are offered one (usually in a letter that says something like “Because of your excellent record, you have been chosen for a special new Widget Store be sure you know what you are getting into before you accept. You have no obligation to accept the offer, whatever form it’s made in, (your permission is required to issue this new dual card, although the offer may not tell you this). You can simply not accept it and keep your old, non-dual card, should you so choose. |