Comenity Bank has partnered with retailers for decades to issue store-branded credit cards. It currently works with a number of big brands, including Ikea, Wayfair and GameStop.
Comenity Bank recently underwent a brand change. It’s now Bread Financial, a financial services company offering payment, lending and savings products, among others. That means if you’re already a Comenity cardholder, you’ll eventually see Bread Financial and its new logo replace the Comenity Bank name and logo.
Store credit cards are credit cards co-branded with retailers to reward consumers when they shop at that specific store. Comenity -- or Bread Financial -- is the issuing bank for more than 100 store credit cards.
What is a store credit card?
A store credit card is a credit card offered specifically by a retailer. Some, called open-loop cards, let you use the card elsewhere; closed-loop cards only allow you to shop at that specific store. You’ll earn rewards for purchases or gain access to special discounts and perks. Many store credit cards let you use the card in-store or online.
Qualifying for a store credit card is much like any other type of credit card. You’ll complete a credit card application with some personal information -- like your birthdate, address and Social Security number -- and you’ll approve a credit check.
Store credit cards might have a lower threshold to qualify compared to other types of credit cards that can be used everywhere. If you have fair or bad credit, you might qualify for a store credit card faster than a general one. Just be aware they typically have higher annual percentage rates than standard credit cards.
Which stores work with Comenity Bank?
Comenity Bank, or Bread Financial, is the issuing bank for some of your favorite retailers’ credit cards like Bed Bath & Beyond, Eddie Bauer and even the NFL. Comenity Bank issues over 100 store cards, including for:
Ikea
Ann Taylor
Victoria’s Secret
DSW
BJ’s
Eddie Bauer
Sony
Forever 21
GameStop
Lane Bryant
Tire Kingdom
Overstock
Wayfair
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Each retailer sets its own incentives. For instance, the Wayfair Mastercard® offers $40 off your qualifying first order of $250 or more. It also earns 5% back at Wayfair, 3% at grocery stores, 2% online and 1% everywhere else, if you choose to earn rewards instead of special financing. The NFL Extra Points Visa® Credit Card earns 3% back in rewards when you buy from the NFL, plus 2% back at grocery stores, for food delivery and gyms, among others.
If you’re exploring store-branded credit cards, you can look at the individual benefits set by the store. For instance, do they offer cash back? And if so, how much? Can you use the card anywhere else, or only with the retailer?
Pros and cons of Comenity Bank credit cards
Like all credit cards, the ones issued by Comenity Bank/Bread Financial have their benefits and drawbacks.
Pros
Easy entry to credit building:Many store credit cards have a lower threshold for qualification. That means if you don’t have much credit and want to build it without getting a secured credit card, you may qualify for a store credit card.
Earn rewards:While programs vary based on the retailer, most store credit cards offer some type of rewards or discounts.
Welcome offers:Some companies offer welcome bonuses or special deals, which might be worth signing up for depending on the size of the bonus and how frequently you shop.
Cons
Limited use: Depending on the retailer, you might be limited in where you can use your card. Some companies only allow the card to be used at its stores (whether online or at brick-and-mortar locations).
Higher interest rates: Most store credit cards charge higher interest rates than other types of credit cards.
The bottom line
For frequent shoppers, store credit cards might be worth exploring. You can earn rewards and build your credit, especially if you have lower credit scores. Just be sure to not carry a balance to avoid high interest charges.
Comenity Bank, now Bread Financial, offers dozens of different credit cards for various stores and companies. Remember, when you complete a credit card application, your credit score takes a temporary dip -- so you may not want to apply for too many retailer cards in quick succession.
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A TCPA class action lawsuit was filed against Comenity Bank—which owns a number of popular store credit cards like Abercrombie and Fitch, Crate & Barrel, Ann Taylor, and Victoria's Secret just to name a few—alleging the bank placed call to consumers' cell phones using an automatic telephone dialing system and/or a ...
Because of their higher interest rates, lower credit limits and limited usability, store cards aren't always the most efficient credit tools out there. But because they're easier to qualify for, they can be a boon to those who have borderline credit or are just establishing credit, as long as they're used responsibly.
If you open but never use a store credit card, nothing will most likely happen. However, the issuer could close your card due to inactivity. If you want to be proactive, you can call the phone number listed on the reverse of the card to cancel it yourself.
If you do a lot of shopping at a single retailer, a store credit card might be worth it — but consider pairing your store card with a general-purpose credit card that offers lower interest rates and allows you to earn rewards on a broader range of purchases.
All types of credit cards have the ability to impact your credit score. This includes store credit card (or retail cards). Store credit cards are similar to everyday personal credit cards in the sense that how you use them will affect your overall credit score.
Most credit cards provide an interest-free grace period of around 21 days starting from the day your monthly statement is generated, to the day your payment is due.
Your Comenity Bank credit card could have been closed for various reasons, including the following: Inactivity. Your account was in default. Missed payments.
No, Comenity Bank is not owned by Capital One, it is a Bread Financial company that mostly issues store credit cards. Capital One, on the other hand, is one of the biggest banks in the U.S., offering a range of financial products and services, including credit cards, auto loans, and savings accounts.
It is not hard to get approved by Comenity Bank because most of the credit cards issued by Comenity Bank are available to applicants with fair credit or better. You should have good odds of approval for a Comenity credit card if you have a 640+ credit score and consistent income.
The US Federal Depository Insurance Corporation has punished Comenity Bank of Wilmington in Delaware and Comenity Capital Bank of Salt Lake City in Utah for deceptive practices related to the marketing and servicing of credit card "add-on products," in breach of s5 Federal Trade Commission Act.
Welcome! In October 2022, Comenity Capital Bank will take over issuance and servicing of your existing AAA credit card account from Bank of America®. Your new card will change its name to AAA Travel Advantage Visa® Credit Card and provide added best-in-class benefits and service to your account.
In most cases, store credit cards aren't the best credit cards on the market. They often come with higher interest rates and limited rewards options — and unless you get a co-branded retail card, you may only be able to use your store card to make purchases with a specific retailer.
If you handle the account well, a store credit card has the potential to help you improve your credit score. There are restrictions, though, that you should be aware of before applying.
Most store credit cards aren't worth the sign-up offer because of high interest rates, limited rewards, and sparse benefits. And the rewards you can earn from store-branded credit cards typically aren't as valuable as the points, miles, or cash back you can earn from the best credit cards.
Sometimes the interest rate and charges for having a store card can be higher than an ordinary credit card. For example, the APR on a store card can be 30% or more, whereas a traditional credit card might be 18%. This isn't a problem if you're always able to clear your balance in full each month.
Introduction: My name is Kimberely Baumbach CPA, I am a gorgeous, bright, charming, encouraging, zealous, lively, good person who loves writing and wants to share my knowledge and understanding with you.
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