Store credit cards transitioning to Visa/Mastercard

I recently got a letter offering me the option to opt out of my store revolving credit account’s transition to a Visa card. I have no idea of the pros/cons of having these co-branded “store visa/mastercards” and am not finding much clarity via Google.
I have zero revolving account debt and very little credit card debt (will be at zero at end of 2019 thanks to a comfy zero % balance transfer which allows me to pay off and add to my emergency fund, and then I’ll be debt free, save for my car payment). However, I have a TON of available credit- more than it would ever be smart to use. Not sure show much available credit is too much (is there such thing?), or whether these department store cards turning to Visa/Mastercard makes any difference re credit score/credit-worthiness.


Just curious, but what store is this? I’m amazed there are still stores out there that haven’t transitioned their credit departments to Visa/MC. Even Sears, which practically invented revolving store credit, recognized 30 years ago that they would rather be a store than a bank, and spun off their credit department to become Discover.

I don’t think transitioning the account will have any large effect on your credit, good or bad. It’s generally a good thing to have lots of credit available, as long as your utilization ratio can support it. (E.g. if you have $60,000 in credit available but only put 30 bux on your cards each month, that’s a red flag. But if you spend a few grand each month and pay it off, that’s fine.)

You can get good tips on optimizing your score, if you want to play that game, by signing up for Credit Karma.

But honestly, if you have a clean record and pay things on top, squeezing a few more points out of your credit score doesn’t really benefit you in any way. Lenders don’t really care about the difference between a 700 and an 850. You’re a good credit risk as long as your score is high.

Why is that a red flag? That pretty much describes my credit usage, and my credit score is in the 800+ range and has been for many years. I pay cash for ALL my non-online purchases.

It’s a red flag to have a very low utilization ratio because it means you have a tremendous amount of credit available to you that you might not have the resources to actually cover if you suddenly use it. That’s why people who try to game this stuff recommend shooting for a utilization ratio between 10 and 30 percent.

But again, that only accounts for a portion of your score; a very low ratio is better than none at all and much better than a very high one.

Or it’s a sign that you don’t need much credit. Maybe that’s because you have liquidity and credit is not a necessary asset? Why would that be a bad thing?

By your logic, I would improve my credit score if I reduced my available credit by a factor of ten. Then my utilization ratio would go up, followed by my score, right?

This isn’t true. Discover was always separate from Sears Credit. I had a Sears credit card for years and they started hitting me up with offers to change it to a Sears Mastercard. I eventually caved and made the switch, as the MC was useful in more places than Sears. After a few months, I started getting offers to get a Sears charge card again.

Your credit score is not a measure of how much you need credit, how much liquidity you have available, or how well you manage your finances. It is a statistical measure of factors that correlate with historical on-time payment of loans. The FICO people have determined that a very low utilization ratio correlates with increased risk. That’s why they track it.

No, because a high utilization ratio is also bad. Like I said, the nerds who track this stuff closely recommend maintaining 10-30%.

Interesting! I never knew Sears had a branded MasterCard. I remember my dad had a Sears credit account and the salesmen there eventually persuaded him to close it and switch to Discover.

I’m very curious about this, too; it’s been at least fifteen years since I’ve seen a “this store only” credit card in the U.S., and I had believed them to be completely extinct.

One potential small downside. Part of your credit score is the average age of your credit lines and you would be trading a 20yo card for a 0.

According to Credit Karma, that is a medium impact factor on the credit score so you might lose a point or two depending on how many other accounts you have and how old they are.

I believe JCPenney has a store only card administered by Synchrony in addition to their MC co-branded card.

Comenity Bank has 163 store credit cards (as per this list) and as far as I know they are not Visa or Mastercard (the two I carry aren’t).

Comenity Bank is a division of the company where I work, in fact. :slight_smile: I think that most of them are, in fact, Visa or Mastercard, but it does look like some may not be. As I look through the listings, for example, there’s no Visa or MC logo on the Abercrombie & Fitch or Beall’s cards.

So, ignorance fought!

My wife had a Nordstrom card until about a year ago when it was changed to a Nordstrom’s Visa.

Best Buy

Does this mean I should consider occasionally closing an older card and opening a new one? My history has included occasionally opening a new one for some 0% financing deal on a larger purchase (e.g. bed, appliance, etc), but I haven’t made a habit of closing older cards. I suppose I should do that also, huh?

When I look at my spending, after the last of my debt is paid off, and if I continue to spend in other ways besides using a card (because I’ve gotten in the mindset that credit card usage = bad), I’ll really only be utilizing about 4% of my available credit. So I should consider either using the card(s) more and paying off monthly, or bringing down my limits to a utilization of 10-30%, or both?

Also: my FICO is 841, so I’m in good shape, but I want to STAY in good shape.

Completely the opposite. You want your average credit age to be as old as Methuselah. The longer your credit history the better. You should actually avoid taking on a new credit card unless there’s a good reason to like some of the perks they offer.