With Sears Bankruptcy, What Happens to Your Card—And Debt?!?
With the Kennewick Columbia Center Sears being the latest victim of the Sears Holdings bankruptcy, many are wondering what will happen to your card?
According to the financial website Clark.com, there are 5 likely scenarios;
- your card might still work online. If you remember back to 2000, when Montgomery Ward closed, much like Sears, it resurfaced as an online only outlet. This could happen with Sears. It's possible it will resurface online only.
- your loyalty program will go away, even if Sears Holdings is able to save a few hundred stores in the Chapter 11 reorganization, or online like Montgomery Ward. That means all your perks and reward points--poof! Gone.
- You may get a new credit card, maybe not. If the bank decides to issue a generic card with the retailer logo on it (if Sears survives) this could happen. If so, your account will transition to this new holder. Or, you may not get a new one and can't buy there anymore at all (if they close and do not resurface)
- You are still responsible for your personal bill on the card. Sears didn't 'own' the debt, a bank does, and they will still want to be paid. Pay it off ASAP to ensure you're clear when the smoke settles.
- Your card and information could be sold to another retailer. You would be notified who purchased it, if this happens, and if there are buying options from new retailer, and where to send your payments. Many are hoping this does not happen, including experts.
It's for this reason that many financial experts say you shouldn't have a 'store' credit card. Although Target and Walmart are likely to never go under, you can never tell. With so many traditional retailers going bankrupt, many experts say you should pay off your debt and get rid of the card. They also tend to have the highest interest rates as well.