Nick went shopping recently at Banana Republic and applied for a store credit card. Now he’s being called by a collections department and receiving contradictory stories about whether or not the retailer has his correct address on file.

After reading his story below, you might want to remember that if you apply for a store credit card, it’s possible your purchase at the time you apply will be charged to it. This is why you also want to always reconcile your bank statement with your debit purchases.

I recently moved and started a new job, and went to Banana Republic to buy some work clothes. In late June, I purchased about $100 worth of clothing, and was offered a large discount if I applied for a Banana Republic card. I did so, and left the store. Today, I received a call from Banana Republic collections claiming that I was behind on card payments, and owe $112.78. I had not received the card, a bill, a phone call, or any other indication that the card was approved and active until that call. According to the card service company, the card was mailed (to my correct address) on June 4th, and my first statement was issued June 21st. I have seen neither of these documents.

The first person I spoke with quoted my correct address to me, and agreed to waive the additional fees that had been added to my account, but informed me that my purchase of $87.78 remained on the account. My debit card was swiped at the point of sale, but the salesperson did not charge the purchase to my debit card, rather applying it to my not-yet-approved credit card. I do not recall being informed of this significant bit of information. I asked to pay the amount over the phone and close the card, but was told that I’d be forced to pay a $15 fee to pay by phone. I asked to speak to management. When transferred, the call mysteriously dropped.

The second person I spoke with, again in the first tier, claimed that my address had been entered incorrectly, directly contradicting the previous representative, and that my card and statement had been returned to them by the postal service. She offered to close my account for a minimum payment and send a final bill to my address, which they claim will arrive on August 29th.

After all of this, I did some cursory research into Banana Republic’s credit cards and discovered that my experience was not only common, it seems almost to be systematized – others report similar situations where they receive no information and no bills, then are called by collections and told that they are a month or two past due and that late fees have been added to their account. Similarly, many people find that attempting to move beyond tier-1 support leads to mysterious dropped calls. I was luckier than most I’ve read about in that I managed to have all extra charges removed from my account, but I still feel as though an attempted scam was barely foiled.

I would warn anyone thinking of a BR store card to steer clear. Even if there is no malice at work, there certainly is gross incompetence.

Is it system-wide? There are some interesting complaints out there about Banana Republic’s credit cards, and all of them concern problems with billing addresses or account errors. But the volume of complaints for Banana Republic cards is low compared to some of the Internet’s more famous bad companies.

At any rate, it’s better not to agree on the spur of the moment to apply for a store credit card. If you’re committed to getting one, stop by the cashier on your way into the store and pick up a copy of the terms and conditions, so you know what you’re getting into before the cashier hits you up with a discount offer.

“Banana Republic Complaints – credit card fraud” [Complaints Board]
“Banana Republic Complaints – Terrible company!” [Complaints Board]
“Jonathan of Queens, NY March 24, 2010” [Consumer Affairs]

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