how do store "debit" cards affect credit?

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babysteps
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how do store "debit" cards affect credit?

Postby babysteps » Fri Nov 02, 2012 8:51 am

Caveat: we (spouse & I) decided not to get the store debit card, so this is just out of curiosity.

Do store "debit" cards act more or less like having a store credit card from a credit score perspective?

The question came up when we were making a planned-for, on-sale purchase at Target. Target offers 5% discount on purchases made with any of their 3 financial products - Target personal credit card, Target business credit card, or Target personal debit card. We know we don't want/need a store credit card & I think we know that store credit cards don't necessarily help build a credit score. The debit card sounded like it might be a workable idea, since it wouldn't be credit and since we think we know that bank debit cards have no impact on credit scores...but turns out Target says it *does* report the debit card activity.

Bichon Frise
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Re: how do store "debit" cards affect credit?

Postby Bichon Frise » Sat Nov 03, 2012 12:53 pm

why doesn't a store credit card help to build credit?

I would expect the same kind of pull that you would get from opening an account. You have to tie this to an existing bank account.

In short, it shouldn't affect your credit. But, the target cards aren't really worth it, so I haven't looked at it closely. So, I'm ready to be corrected.
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DoingHomework
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Re: how do store "debit" cards affect credit?

Postby DoingHomework » Sat Nov 03, 2012 4:30 pm

Bichon Frise wrote:why doesn't a store credit card help to build credit?

I would expect the same kind of pull that you would get from opening an account. You have to tie this to an existing bank account.

In short, it shouldn't affect your credit. But, the target cards aren't really worth it, so I haven't looked at it closely. So, I'm ready to be corrected.


I'm a little confused by this whole discussion. Debit cards of any kind do not extend credit so they should not impact credit, unless you overdraw. Store credit cards should affect credit. But they typically have low limits so even a modest user could run into utilization problems.

I have the normal debit cards from my banks but I no longer have any store cards of any type. My bank debit cards do not even appear on my credit report.

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Re: how do store "debit" cards affect credit?

Postby Bichon Frise » Sat Nov 03, 2012 8:51 pm

DoingHomework wrote:
Bichon Frise wrote:why doesn't a store credit card help to build credit?

I would expect the same kind of pull that you would get from opening an account. You have to tie this to an existing bank account.

In short, it shouldn't affect your credit. But, the target cards aren't really worth it, so I haven't looked at it closely. So, I'm ready to be corrected.


I'm a little confused by this whole discussion. Debit cards of any kind do not extend credit so they should not impact credit, unless you overdraw. Store credit cards should affect credit. But they typically have low limits so even a modest user could run into utilization problems.

I have the normal debit cards from my banks but I no longer have any store cards of any type. My bank debit cards do not even appear on my credit report.


that's my point. you shouldn't expect it to be anything different than opening a bank account (e.g. "soft" pull).
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

Ard
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Re: how do store "debit" cards affect credit?

Postby Ard » Sat Nov 03, 2012 10:18 pm

babysteps wrote:...but turns out Target says it *does* report the debit card activity.
Perhaps you've run into an exception to what is considered "traditional" in their reporting of the debit card activity to FICA. (if I understand you correctly) Perhaps, they've had a string of bad debts or uncollectables so they've managed to find a loophole to begin tightening things up a bit. Just speculating of course.

Realizing this to be an older post -- anyone else experiencing this..is it trending?

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Re: how do store "debit" cards affect credit?

Postby stannius » Tue Nov 06, 2012 10:45 am

It's also possible the person you talked to misspoke or was misinformed.

Ard
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Re: how do store "debit" cards affect credit?

Postby Ard » Tue Nov 06, 2012 11:30 am

stannius wrote:It's also possible the person you talked to misspoke or was misinformed.
- Happens all the time these days.


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