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Store Cards Just Keep Getting Worse

We certainly know that store credit cards routinely charge higher interest rates and more costly fees than other credit cards.

But we were still surprised by a “change in terms” letter from the bank that provides cards for many stores, including Victoria’s Secret, Avenue, Limited, New York & Co., Abercrombie & Fitch, JCrew, Express, Pottery Barn and Restoration Hardware.

Cardholders at many stores are facing everything from a new fee for getting a monthly statement through the mail to outrageous interest rates of 24.99%.First of all, World Financial Network National Bank will impose a $1 fee for every paper statement customers receive.

While some banks have begun charging checking account customers who still want to receive statements in the mail, this is the first time we’ve heard of a bank imposing such a fee on credit card customers.

These cards have also been charging adjustable interest rates that ranged from 11.99% to 24.99% APR.

When the changes take effect everyone will pay the maximum 24.99% — 21.74% plus prime (which is currently 3.25%).

That’s much higher than the 13% to 18% APR you’ll pay on the typical adjustable-rate Visa and MasterCard.

Finally, the new agreement says cardholders must still waive their right to take billing disputes to court and settle all disagreements in arbitration.

This comes at a time most major credit cards are dropping mandatory arbitration because it’s so blatantly tilted against the consumer.

Of course you can opt out of these changes by sending World Financial a letter refusing to accept the changes, closing the account and paying off your balance under the old terms.

That certainly seems like the smart thing to do for credit cards with terms as bad as these.

Comments (4)
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4 Existing Comments
  1. Lisa said:
    on December 30th at 12:02 pm

    I just cancelled by Victoria Secret account because of a charge of 1.00 per mailed statement. I pay off all bills each month, but no way will I pay for THEM to send me a bill! Bye Bye VS!

  2. Jen Miller said:
    on December 30th at 12:41 pm

    I’m canceling mine too. It’s ridiculous.

  3. katrina said:
    on January 19th at 12:57 am

    The VS card gives you a lot of discounts and promos. Just switch to paperless and you will not be charged. If you buy things from VS(and you do if you have a card) then even a $1 fee will be payed of by couple of their free panty coupons or $10 certificates for your birthday… Yes I am furious about it, but it’s not about emotions when it’s about money…

  4. k said:
    on September 22nd at 01:03 pm

    I actually like the idea of charging for a paper statement. It’s a good way to get people who don’t even open their bills and just pay online to finally check the ‘switch to paperless’ option. I think that as long as there is a way to appeal to them not to charge you the fee (for instance if you live in a home with no internet, then you shouldn’t have to be charged the fee) then for the vast majority it is a good idea.