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.
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.