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Store Credit Cards Issued By Nat'l Banks


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The SOL for credit card debt in SC is 3 years. However, a store credit card is 6 years.

I contacted the SC Dept. of Consumer Affairs and asked the reason for the difference. Their response was that a store credit card agreement usually provides for a security interest in the property, thus making any transaction a secured transaction. Therefore, if the bill is not paid, they can repossess the property. I can understand that.

Here's my quandry:

A national chain such as Best Buy or Lowe's offers credit cards that are issued through national banks. For instance, HSBC issues Best Buy credit cards. If one purchases an item from Best Buy using the store credit card, Best Buy receives payment from HSBC. Even if one defaults on the account, Best Buy has been paid. Best Buy cannot repossess the property, because the debt is with HSBC.

1. How is this a secured transaction?

2. Has anyone ever heard of HSBC repossessing a computer?

3. Would a store card issued through a national bank (which insures the store is paid) be a secured transaction?

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Usually the cardmember agreement states if it is a secured transaction.

Sears, when they ran their own credit cards, were notorious for this. When Citibank took over the Sears cards, they stopped saying there was a security interest in the items purchased.

Edited to update: I recall that for the Sears card, before Citibank took it over, the sales slip that you signed also stated the security interest in the items purchased, and by signing it you explicitly acknowledged the security interest.

Edited by nobk4me
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Usually the cardmember agreement states if it is a secured transaction.

Sears, when they ran their own credit cards, were notorious for this. When Citibank took over the Sears cards, they stopped saying there was a security interest in the items purchased.

Thank you. I can understand a store stating a transaction is secured if the STORE is the one issuing the credit card. I assume the reason the claim is no longer made in Sears card is because Sears is no longer issuing the cards. Citibank is now the issuer.

That's my point. Since a national bank issues the store cards, the national bank pays the store. Therefore, can that national bank state that a transaction is secured, and the property can be repossessed? It would have to be repossessed by the bank because the store was already paid.

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I think the cardholder agreement may have language that ties you to the issuer more than to the store. They can't have it both ways. The lender actually extending the credit is the one you are liable to; fail to pay and that's who sues you. They most likely kick back a percentage of the interest to the store as a reward for generating business for them. The store at this point becomes nothing more than a loan servicer. They may have an agreement between them that gives the store the authority to repo the stuff on their behalf, sell it, or at least issue some sort of credit against the account. Best thing is to ditch the card and use a regular Visa not connected to the store.

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Since I have a copies of a couple of complaints filed over store branded cards, I'll tell you how they compare to normal CC complaints. The plaintiff in all cases was Citibank, and the store cards were for Home Depot.

1) None of the complaints have a full cardholder agreement filed with them, but some do have some of the terms that would have been printed on the back of a statement.

2) When regarding the Home Depot complaints, the information on the statements do say that you can make payments at a Home Depot store directly. The address on the billing statements is Columbus Ohio, however, and it is a PO Box that is in the same Zip as Citicards. The number of the PO Box is close in number to the one that is used for a normal Citibank CCs too. The PO Box is listed as belonging to Home Depot Credit Services. I'd bet money that this is just some Citi thing that has the Home Depot name on it.

3) The complaints used by the attorneys are identical between the Home Depot cards and the normal Citicards, except, of course, for the specific details of the case, such as defendant's name, address and the dollar amount.

4) The affidavits are the same form affidavits that Citi was using last year before the merger between Citibank (South Dakota) N.A. and Citibank N.A. There is no difference in Citi's eyes just because one was a normal Citicard and the other was a Home Depot card. In other words, some defendants that don't realize how the game works are going to be confused over being sued by Citibank.

5) One thing with the Home Depot cards is that if you send a written dispute to the PO Box listed on the statement because you are dissatisfied with the goods you purchased, they'll investigate. I'm guessing that Citi has some contract with Home Depot dealing with dissatisfied customers.

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Thanks guys!

I did some more research and found out why store cards have a 6 year SOL in SC. In the case of Best Buy, HSBC's agreement states that they have a security interest in the account. That makes it a form of a secured card. It also falls under SC's UCC code and, as a result, has a 6 year SOL.

I don't know if all store card agrements have the security language, but it might be something one should look into in reference to state laws.

Now, the biggie. Does the JDB know the card has a 6 year SOL? :)

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Now, the biggie. Does the JDB know the card has a 6 year SOL?

1. Is there a choice of law specified in the store card agreement that could be used to defeat the SOL argument?

2. Does the average JDB attorney know that he should remove his trousers before making the meatloaf surprise in his significant other's bathroom?

3. Do we all need to be on the lookout for strange creatures in the road at night? It is spring, and this is the mating season for the JDB species.

4. Is Coltfan really Bill Clinton's long lost nephew?

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Now, the biggie. Does the JDB know the card has a 6 year SOL?

1. Is there a choice of law specified in the store card agreement that could be used to defeat the SOL argument?

2. Does the average JDB attorney know that he should remove his trousers before making the meatloaf surprise in his significant other's bathroom?

3. Do we all need to be on the lookout for strange creatures in the road at night? It is spring, and this is the mating season for the JDB species.

4. Is Coltfan really Bill Clinton's long lost nephew?

1. Nevada. I don't know NV's SOL for secured debt.

2. That's a visual I didn't need. :shock:

3. It's scary to know they can procreate.

4. It depends upon your meaning of the word "is".

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Nevada's SOL is 4 years for an open account. Every definition I've seen establishes credit card accounts as open. Bill was actually very astute with that one, they asked him as I recall something along the lines of "is there a relationship etc....between you and Monica L...." At that time, there was not, so technically he outfoxed them by answering the way he did. "Is" isn't the same as "was." However, his fatal mistake was lying in court about this to escape the harrassment trail with Paula Jones, who looked very good in Penthouse. Just my opinion, yours may vary. Also, we have not answered the big question; Did Coltfan's last girlfriend have antlers?

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