By Rachel Morey


5 Min. To Read

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Proof that it’s important to read notifications from credit card companies about changing terms came this week from Comenity Bank. The financial company manages lines of credit for department and grocery stores across the country.

They are well-known as a bank that issues small lines of credit to consumers with low or no credit scores. The company doesn’t conduct hard credit file pulls so it’s much easier to get a line of credit even with a low FICO score. and Victoria’s Secret are just a few of the department stores that work with Comenity Bank to manage their consumer lines of credit.

Consumers who are young or have a thin credit file may also find the concept of an easy-to-get store card from one of their favorite department stores tempting, even with higher interest rates and stiff late payment fees. Comenity Bank eliminated the grace period for new charges in the newest version of their terms and conditions issued in May of 2017. A new bill indicates the new balance on the account and a minimum amount due. Card holders who habitually pay off their new balance before the due date each month avoid paying interest on the outstanding balance.

Paying the minimum amount due leaves the remainder of the amount owed to accrue interest charges as high a 29.99%APR, depending on the card holder’s credit rating and state of residence.

With the elimination of the grace period on new purchases, all customers, even those who want to pay their balance in full and on time, are subject to interest charges beginning the same day they make a purchase with a Comenity Bank card.

Shoppers using their card before the payment due date but after the newest bill issues won’t see those charges on the account as part of their new balance. It may take three to five business days for new charges to appear on an account. To make things even more complicated for card holders, it takes between seven and ten days for a mailed payment to show up as a credit on the account. Electronic payments typically take 24 hours, but could take as long as three days.

Aside from keeping receipts for every purchase and adding them together to make sure all new charges are paid in full each month, managing a Comenity Bank credit card account without paying monthly interest charges may no longer be a viable option for many loyal customers. New customers often receive 10%-20% off their entire first purchase if they’ll agree to apply for the card either in the store or online. Popular retail locations like Bed Bath & Beyond, Abercrombie & Fitch, Crate & Barrel, Forever 21, Younkers, Zales, Restoration Hardware, Pottery Barn, J.Crew, Eddie Bauer, Meijer, and Williams-Sonoma are just a few of their brands. Comenity Bank also issues Medical Credit Cards for ALPHAEON, HealthiPlan, Lifestyle Lift, My Smile Care, MedChoice, H3 WellnessPlus, and Cosmeticredit. Their auto branded credit cards include Lexus, Toyota, Taylor Rental, and Grand Rental Station.

Card holders who have a store card from Comenity Bank should check their terms of service carefully for changes to how and when interest accrues on the account. For Comenity’s customers who must now reevaluate how they pay the monthly bill to avoid high interest charges, this change may be a deal-breaker.

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