Nordstrom Bank May Not Give You Full Access To Your Available Credit For Up To 21 Days After A Payment Is Credited To Your Account

As you may recall, on Friday I reported that Nordstrom Bank would be raising rates on all of its credit- and store-card offerings (link here). On Monday I received my official notification in the mail. In addition to the rate changes that I laid out, though, there are also some new terms that have been added to my card agreement, one of which should be of particular interest to cardholders. Beginning January 1, 2009, payments to your Nordstrom account could possibly be held for up to 21 days after a payment is credited to your account. Previously, Nordstrom said that it could hold payments for up to five days.

(Note: After I originally published this story, I was able to talk with someone about this disclosure. I'm told that the disclosure was necessary, though it will not apply to most of Nordstrom's customers. Here's why: Nordstrom plans to impose this 21-day hold on customers who have bounced checks, done ACH payments that didn't clear, or who have had a history of being late on their account. By and large, those are the only people who are impacted by this 21-day hold. That said, the disclosure was sent to all 2 million Nordstrom customers. Because the disclosure has now been made, Nordstrom could theoretically impose this hold on all of its customers -- though that's obviously unlikely.)

In essence, what Nordstrom is saying is that if you make a payment of $5,000, and your limit is $10,000, you may only have access to $5,000 of your limit -- even if the payment has been credited to your account and the payment has cleared your bank. "After a payment is credited to my Nordstrom Visa Signature, Nordstrom Platinum and Classic Visa, or Nordstrom retail account, it may take up to 21 days before my total available credit is restored in an amount equivalent to the payment amount," according to the new Nordstrom agreement. As an example, Nordstrom says that even "if I pay my balance in full, it may take up to 21 days after my payment is made before that payment is considered in determining the amount I can borrow on my account." Nordstrom does say "may," though. In law, "may" is a lot more flexible than "shall," which means "must." Still, I'm surprised by the amount of days that Nordstrom could take to release the available credit. Just goes to show how conservative Nordstrom is.

Imagine someone who uses a good chunk of their available credit each month. Beginning in January, this same customer may not have access to the full limit for up to three weeks. I wonder what prompted this change. (See my disclosure above. Customers who have had trouble with their accounts forced Nordstrom to revise the terms of its card agreement.) But Nordstrom can't possibly argue that it takes 21 days for funds to clear. Indeed, this is the longest hold period I've seen.

Most of my card companies credit my account -- and make my credit available -- within a day or two of the payment being processed. (Having talked with someone at Nordstrom, I can see why the disclosure was added to the card agreement. I am no longer miffed; the length of the hold period is still interesting, though.)

We'll see if Nordstrom is the only bank that moves the hold period to 21 days. A reader tells me that his Chase agreement (which may not be the most up-to-date agreement) has a 15-day provision; and Juniper has a 7-day provision (my Juniper agreement says the same thing). Discover, meanwhile, has a 15-day provision, I am told. There are no such disclosures for Bank of America, American Express, or Citibank.

There were other changes in the agreement as well, but they're nothing to write about. Mostly changes to late payment charges and minimum monthly payments.

Related Articles:

Sign Of The Times: Nordstrom Bank To Lift Interest Rates On Its Credit and Store Cards