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What Happens to My Store Card if a Retailer Goes Bankrupt?

The retail industry is suffering, with many firms declaring administration. If you own a store card with one of these groups, here's what to expect.


  • One way or another, you’ll still probably have to pay what you owe;
  • Your benefits and rewards may no longer apply though;
  • We recommend dealing with your store card debt as soon as possible
Apply for Debt Consolidation

To say it’s been a chaotic few months for the retail industry would be an understatement. The sector has suffered greatly with many businesses either going into administration or having to make substantial job cuts, such as Debenhams, Laura Ashley, and Monsoon.

If you have a store card with any of the companies now having to close their doors, you may wonder what happens to your debt. For example, is it now written off?

Read on and we’ll explain all you need to know:

Is the business closed?

If you think a business is going into administration, it’s worth confirming this. The company might start trading under a different name, operate through a sister store, be bought out, or just close stores and move completely online.

Even when a retailer declares bankruptcy, their stores won’t close overnight. You should receive notice from the business regarding your account and the options open to you.

What happens to my store card debt?

Although it’s reasonable to assume your store card debt will be written off following closure of a business, this is – unfortunately – not the case. When a retailer sells a store card, they will usually do so through a third-party financial company. Therefore, the amount you owe isn’t to the bankrupt business but instead to this organisation.

However, it’s not completely out of the question for the retailer to own your debt – It’s unlikely but can still happen. In this situation, you would also probably be responsible for your store card debt.

When a company goes into administration, its assets are available for purchase. A company would buy your debt – along with the accounts of many others – and then you’ll need to start paying them.

To bullet point:

You’ll still need to pay your store card debt.

What about my benefits/rewards?

During the administration process, a company will send over details regarding your account and what will happen to any benefits or rewards you’ve accumulated. Usually, you’ll be given a timeframe as to when you must redeem these.

Past the notice period, these bonuses will be rendered void.

It’s worth noting that, should a retailer move the business online, you may be able to use your rewards on the company’s website.

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Our advice: Deal with your store card debt as soon as possible

If you have a store card with a company which is facing administration, you may want to settle this debt as soon as possible. Even when the retailer goes bust, interest rates and charges on your account will still apply. Therefore, you could just be left with an expensive piece of plastic which you can’t use.

However, unless if you’re in a secure financial position, settling your store card debt is easier said than done. To avoid high charges for a store card, you may wish to close this with help from a debt consolidation loan.

This allows you to combine multiple debts into one monthly payment – hopefully making your financial situation much easier to manage. In many cases, this can even leave you with more money left over at the end of the month.

To find out if you’re eligible, click the button below:

Do I Qualify for Debt Consolidation?
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APRs from 5.8% to 89.9%

We are a broker, not a lender.

Unsecured Loan Representative 69.9% APR

Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.

Secured Representative 11.7% APR

If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.

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