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Macy’s to Lower Your Credit Score?


I’m completely neurotic about my credit. I’ve never paid a bill late, am very careful about opening new credit cards and would flat-out freak if my credit score dropped below 720. That’s why I was particularly revolted when I read about Macy’s new “information sharing” practice on The Consumerist.

Here’s the low-down: If you have a Macy’s credit card but haven’t used it in more than two years, Macy’s will give Citibank the thumbs up to open up a Citibank Mastercard on your behalf. You do have a chance to opt out, but that would require that you actually opened and read what could have only been a long form-letter from Macy’s detailing this new practice (and if you’re anything like me, this letter went straight into the trash before it was given a healthy once-over).

What’s worse? Opening a new credit card account will likely lower your credit score because an “application for credit” typically requires the creditor to log an inquiry on your credit report to determine what interest rate and credit limit to give you (and such an inquiry negatively affects your score). If you simply close your Macy’s account in exchange for your new Citibank card, you’re effectively shortening your credit history, which can also negatively affect your score. Your score may also take a hit if you just close the Citibank card.

What can you do? Well, we can all probably do a better job of at least scanning letters that come through the mail to determine if they’re trash-worthy or important. But if that doesn’t do it, we need to stand up and fight such despicable practices. If your inactive Macy’s card was “flipped” to a Citibank Mastercard, call Macy’s and tell them you think it’s wrong for them to open a credit card account without your permission. If enough people complain, hopefully Macy’s will reconsider this practice.

Another important tip: stay current on your credit report and score so if you miss your warning by mail and assume the credit card sent to you was just another credit card offer, you at least have a last line of defense and are alerted when credit card accounts are opened without your permission.

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  1. That’s just low. I frown upon ye Macy’s.

    Posted by: Mark | August 21, 2007
  2. I will take the hit for closing my account, which I did yesterday. They even offered me % off coupons to stay with them. After pulling this crap, there isn’t anything free they could offer me to stay associated with such a shady company. Sorry Macy’s I’m out!

    Posted by: Kriste | August 21, 2007
  3. okay, time to mobilize… Target (part of Macy’s) did this to us just before we refinanced our mortgage. Nice, because hubby’s credit score tanked and we had to switch a bunch of stuff around to finish the refinance.
    Should we employ this tactic, also featured on the Consumerist? Fax them to death.

    Posted by: Christy | August 22, 2007
  4. Wal-Mart also did this – they bought the credit accounts of the old Montgomerery Ward stores when that company folded.
    The law says that a company can’t send you a card that you didn’t ask for. But, they can send you a new one for an account you have.
    So, with that legal loophole, Wal-Mart sent a lot of people who had old Montgomery Ward charge cards brand new Wal-Mart Master Cards. Evil.
    Good advice to keep on top of your score – also, see what old accounts you might have open that you can close.

    Posted by: Robert | August 24, 2007

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Wednesday, January 17, 2018