Don't be duped into signing up for a store credit card


Opening Credits
Columnist Erica Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

Ask a question.

'Opening Credits' stories


Dear Opening Credits,
My husband and I got misled at a store. They offered a rewards card that we thought would just be linked to our checking account and it turned out to be credit. Then they said if it wasn't approved that we would get a letter of explanation. Instead we got a credit card! We are trying to buy a house and we already had a new credit card (before we decided to buy a house). We don't know what to do because the credit card is already on the credit report. -- Elise


Dear Elise,
I think I know what happened. At some point in your shopping trip, an employee presented you with what you believed was a brochure for a store branded debit card. Instead it was an application for the store's line of credit. 

Unlike credit cards, where you're borrowing money from a lender with each transaction, debit cards are linked to your checking account. When you swipe, the purchase price is automatically pulled from those funds. Because no loan is involved, the store doesn't need to conduct a credit check to see if you qualify, and evidence of the account will never appear on your consumer credit reports. Like some credit cards, these debit cards sometimes have a rewards component. Use it for store purchases and you'll rack up points that you can trade in for cash or merchandise. It may even entitle you to special discounts and member-only events.

Clearly this is not what you signed up for. Because the account is being listed on your credit reports, it is definitely a credit card. Somehow a mistake was made. Time to rewind.

Contact the store. Ask to speak with a manager and calmly but firmly explain what happened. In your own words, tell them:

  • It was never your intention to apply for a credit account.
  • The person you spoke with misled you.
  • You would like to close the account immediately.
  • You want them to stop reporting the account on your credit report, as it was opened in error.

If the store continues to send information about the account to the credit reporting agencies, dispute it with the credit reporting agencies. If you really want to spend some time and energy on this, you can also file a complaint with your state's attorney general's office. You may be in for a tough time, however, since it would be hard to come up with proof that you didn't know you were applying for credit.

Whatever happens, don't panic. A closed account that you never used will not ruin your credit report or scores. It is highly unlikely a lender will bat an eye at it. What they are interested in, of course, is how you've managed your existing accounts, especially in the past few years. Have you been borrowing money and then paying it back on time? If so, wonderful! Do you use credit cards regularly, but always keep the balance low or at zero? Even more wonderful! Your credit rating will reflect such positive behavior and that, along with enough income, will lead to a good mortgage.

After this experience I'm sure you'll be more careful when filling out applications of any kind. Take the time to read over the terms of all agreements. If you're still unclear, get clarification before signing.

See related: Retail cards, the Rodney Dangerfields of credit, deserve respect, 6 tips to use store cards the best way

Meet's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday,'s Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

Published: June 10, 2015

Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Follow Us

Updated: 10-28-2016

Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.