@pdxuser wrote:
Do some cards ever just stop being offered? Could a store that decides it wants to offer a Visa decide a few years later that it doesn't want to offer CCs anymore? What happens if that store gets acquired out of existence, or just goes under? Heck, these days, what if your issuing bank goes under? Do companies ever decide that their Platinum Rewards card is just not something they want to continue to offer, and that they only want to offer their basic Aluminum Visa?
And if this sort of thing ever happens, would your account just be closed, or would you likely be allowed to continue your account with some generic FIA Visa or something?
1. Do some cards ever just stop being offered? Yes, CC issuers tweak their card offerings all the time. Citi just recently stopped offering the Diamond Preferred MC last week and the Prestige a month or two ago. AmEx stopped offering cards like the Optima Platinum and the regular vanila BlueCash a while ago. Examples like these abound.
2. Could a store that decides it wants to offer a Visa decide a few years later that it doesn't want to offer CCs anymore? Of course. In any co-branding or card partnership, each side offers up something to make the whole venture work. The issuer may offer to lower underwriting standards to attract more applicants who then generate more revenue. The store partner may offer better rewards for the same. Any one of the partners may decide that the deal just isn't working out and put a kibosh to it.
3. What happens if that store gets acquired out of existence, or just goes under? Fundamentally, cardholders are customers of the issuing bank first and foremost. Therefore, as long as the bank doesn't go under, it's up to the bank what they want to do. Of course, if the store goes under, then the rewards scheme of the card that rewards shopping or redemptions at the store may not work anymore. In that case, the bank will often decide to convert the cardholders to one of their in-house card products. Usually, if you call in, chances are good that the bank may even allow more leeway in PCing to other cards in their portfolio besides the default one they selected for you.
4. What if your issuing bank goes under? This is very much government policy and IANAL. However, in the US the Office of the Comptroller of the Currency is responsible for supervision of banks and, in conjunction with other agencies like the FDIC and the Fed, will coordinate the response to a bank failure. I believe the normal procedure for dealing with a failing or failed bank is to look for another bank to take it over and assume all its liabilities and assets. In that case, nothing should change for the customers. In the event that no white knight rescuer can be found, banks can be orderly liquidated under supervision of a bankruptcy court which might appoint a receiver to wind down its affairs. In that case, a few things could happen. A bank's card portfolio and clientele is part of its business and that piece could be sold to another bank and the cardholders migrated over. If the division isn't sold, those cardholders who do not owe a balance may just have their accounts closed. Any accounts with balances owed to the bank is considered accounts receivable and that could be sold off to another loan servicer at a discount in which case the customer will be informed that their payment will now go to the servicer who bought their accounts.
5. Do companies ever decide that their Platinum Rewards card is just not something they want to continue to offer, and that they only want to offer their basic Aluminum Visa? Yes, companies may decide that a high end card just isn't competitive enough with other offerings on the market to justify its continued existence or that the expenses can no longer be justified given the returns. Citi did that with the Prestige which many on here suspect cost Citi too much when it comes to redemptions on the 4th night free benefit. Though in general, recent trend over the last few years has been the opposite in terms of banks steadily moving more upmarket and increasing their offerings of premium tier cards. But as mentioned above, card portfolios are constantly being tweaked and adjusted for maximum profitability and market conditions.
6. And if this sort of thing ever happens, would your account just be closed, or would you likely be allowed to continue your account with some generic FIA Visa or something? Provided the bank isn't going under and that the customer is a good customer, banks are usually not in the business of just shedding customers. After all, banks go to great lengths (and costs) to offer lucrative sign up bonuses to attract new customers. If your card is discontinued then usually one of two things happen. Either you will continue to have the same card even if it's no longer open to new applications or you will be changed to a different card in the bank's portfolio. Sometimes you will continue to have the same card for a bit longer until the bank decides to kill the product completely at which point you may be switched to another card.
