Synchrony Bank is a financial institution that issues credit cards and holds deposits, but it is not a bank you walk into
Synchrony Bank is a federally chartered bank that operates entirely online. It does not have physical branches. The company issues credit cards on behalf of major retailers—Target, Amazon, Lowe's, and others—and also offers savings accounts and personal loans directly to consumers. When you use a store credit card, the card itself is issued by Synchrony, even though the branding and rewards belong to the retailer.
Synchrony is owned by Synchrony Financial, a publicly traded company. The bank is regulated by the Office of the Comptroller of the Currency (OCC), which means deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account holder, per bank. This is the same protection that applies to any other bank.
The company makes money by charging interest on credit card balances and personal loans, and by earning interest on the deposits it holds. Retailers partner with Synchrony because the bank handles the entire credit card operation—approval, billing, customer service—so the retailer does not have to.
Key Takeaways
- Synchrony Bank issues store-branded credit cards for retailers like Target, Amazon, and Lowe's, and also offers savings accounts and personal loans directly to consumers.
- Deposits held at Synchrony are FDIC-insured up to $250,000, the same as any other bank, because Synchrony is a federally chartered bank.
- Synchrony has no physical branches; all banking is done online or by phone, which is why its savings account rates are often higher than traditional banks.
- If you carry a balance on a Synchrony-issued store card, you pay interest to Synchrony, not to the retailer.
- Synchrony also services credit card payments and disputes, so if you have a problem with a store card, you contact Synchrony's customer service, not the store.
How Synchrony makes money from store credit cards
When you open a Target RedCard or an Amazon Prime Rewards Visa, Synchrony is the bank behind it. The retailer designs the card, sets the rewards program, and handles marketing. Synchrony handles everything else: they approve your application, issue the card, process your payments, and manage your account.
Synchrony earns money in three ways. First, they charge you interest if you carry a balance—the annual percentage rate (APR) varies by card and your creditworthiness, but store cards typically range from 16% to 25% APR. Second, they charge the retailer an interchange fee every time you swipe the card—usually 1% to 3% of the purchase. Third, they earn interest on the money you deposit when you make a payment.
The retailer benefits because they do not have to build and maintain their own credit card system. Synchrony takes on the risk that you might not pay, and they handle the customer service burden. The retailer gets the customer loyalty and the data about what you buy.
Synchrony's savings accounts and personal loans
Synchrony also offers products directly to consumers that have nothing to do with store cards. Their high-yield savings account pays interest rates that change with the market—currently higher than most brick-and-mortar banks because Synchrony has no branch costs. You open the account online, deposit money by electronic transfer, and earn interest monthly.
Synchrony also issues personal loans ranging from $2,000 to $35,000, depending on your credit and income. These are unsecured loans, meaning you do not pledge collateral. The interest rate depends on your credit score and the loan term you choose. Payments are made by automatic bank transfer.
These products compete directly with other online banks and credit unions. Synchrony advertises them separately from the store card business, so a customer might have a Synchrony savings account and never use a store credit card.
How payments and disputes work with Synchrony
If you have a Synchrony-issued credit card, you make payments to Synchrony, not to the retailer. You can pay online through the Synchrony website or mobile app, by phone, or by mail. Payments typically post within one to three business days depending on the method.
If you dispute a charge on a Synchrony card—say you were charged twice or the item never arrived—you contact Synchrony's customer service, not the store. Synchrony investigates the dispute and either reverses the charge or upholds it. The process is governed by the Fair Credit Billing Act (FCBA), which gives you the right to dispute unauthorized or incorrect charges within 60 days of the statement date.
If you have a problem with a purchase itself—the item is defective, does not fit, or the store's return policy is unclear—that is between you and the retailer. Synchrony handles the payment and dispute mechanism, but not the merchandise issue.
FDIC insurance and account safety
Synchrony Bank holds your deposits in a federally insured account. The FDIC insures deposits up to $250,000 per depositor, per bank. This means if Synchrony failed tomorrow, your money up to that limit would be protected by the federal government.
This protection applies to savings accounts, money market accounts, and checking accounts held at Synchrony. It does not apply to credit card balances—those are debts you owe, not deposits you hold. If Synchrony failed, your credit card debt would be transferred to another bank, and you would continue making payments.
Synchrony uses encryption and multi-factor authentication to protect your login credentials. If someone gains unauthorized access to your account and makes fraudulent transfers, you have protections under the Electronic Funds Transfer Act (EFTA), which limits your liability to $50 if you report the fraud within two business days.
The difference between Synchrony and traditional banks
Synchrony has no physical locations, no tellers, and no branch network. Everything is done online or by phone. This means lower overhead costs, which is why their savings account rates are often higher than Chase or Bank of America. It also means if you need to deposit cash or speak to someone in person, Synchrony is not an option.
Traditional banks make money from deposits, loans, and fees. Synchrony makes money from credit card interest, interchange fees, and loan interest. Synchrony does not charge monthly account fees on savings accounts or checking accounts, but they do charge overdraft fees if you overdraw a checking account.
Synchrony is not a credit union, which means it is not owned by its members and does not operate on a non-profit basis. It is a for-profit bank owned by shareholders.
What happens if you miss a payment to Synchrony
If you miss a credit card payment to Synchrony, the consequences are the same as with any other credit card issuer. Your payment is reported as late to the credit bureaus (Equifax, Experian, TransUnion) after 30 days. A late payment damages your credit score and stays on your credit report for seven years.
Synchrony will charge you a late fee—typically $25 to $40 depending on the card and your account history. If you continue to miss payments, your interest rate may increase to the penalty APR, which can be as high as 29.99% on some cards. After 180 days of non-payment, Synchrony may charge off the account and sell the debt to a collection agency.
If you fall behind on a Synchrony personal loan, the same timeline applies. After 120 days of non-payment, Synchrony may begin collection efforts or file a lawsuit to recover the debt. If you win a judgment, Synchrony can garnish your wages or place a lien on your property, depending on your state's laws.
Frequently Asked Questions
Is Synchrony Bank safe for my savings?
Yes. Synchrony is a federally chartered bank regulated by the OCC, and deposits are FDIC-insured up to $250,000. Your money is as safe as it would be at any other bank. The only risk is that you earn lower interest than you might at a credit union or a higher-yield online bank, depending on current rates.
Can I call Synchrony if I have a problem with my store credit card?
Yes. Synchrony's customer service handles all account issues: payments, disputes, fraud, and billing questions. The phone number is on your statement or card. You do not contact the retailer for credit card problems. For merchandise issues—returns, defects, sizing—contact the retailer directly.
What is the difference between a Synchrony store card and a regular credit card?
A Synchrony store card is issued by Synchrony but branded by the retailer. It typically offers rewards or discounts at that retailer and nowhere else. A regular credit card (like Visa or Mastercard) works at any merchant. Both are issued by banks; Synchrony just happens to specialize in store cards.
If I have a Synchrony savings account, does that count toward my credit score?
No. Savings accounts and deposit accounts do not appear on your credit report and do not affect your credit score. Only credit products—credit cards, loans, lines of credit—are reported to the credit bureaus. A Synchrony savings account is invisible to your credit profile.
What happens to my Synchrony credit card if the retailer goes out of business?
Your card remains active. Synchrony issued the card, not the retailer, so the retailer's business status does not affect your account. You can still use the card anywhere that accepts Visa or Mastercard (depending on the card type), and you still owe the balance to Synchrony. The rewards or discounts tied to that retailer may no longer be available, but your account itself continues.