When a credit union or bank merges, there can be an issue with the debit cards the institution has issued. The debit cards may for a while bear the name of the old bank and it is often a question whether the card is still valid.
Debit cards remain valid for any bank that continues trading, even if the bank has merged into another and almost all traces of its old identity have gone. This goes for banks that have been bought out, credit unions that have voluntarily merged, or any debit card provider that has had to be taken over by another institution due to financial troubles.
Debit cards access an associated account directly, and this bank account is what counts, not the identity of the bank that issued the card. As long as the account is still functioning—and it is always functioning unless the bank goes completely out of business—then the debit card will function with it.
There have been some well publicised incidents of debit cards failing, either when a bank gets into financial trouble or when the bank merges. These events do occasionally happen, but they are temporary and usually the result of computer systems not correctly picking up details, and in very rare cases, a bank temporarily unable to make payments.
Similarly when a debit card is charged, it is charged through the debit card system to the bank account, and the name on the card has no real bearing as to whether it is accepted. The name on the card that really matters is not the name of the bank or even the name of the account holder, but the name of the debit card processor, usually Visa or MasterCard. It is with these providers that the merchant has its commercial account and not the underlying bank.
Although the old debit cards will function properly until their expiry date, it’s often the case that the new bank will want to issue replacements. The new bank may want the cards rebranded with its own name, or perhaps it prefers to utilise another debit card processor. This can also happen when a bank wishes to rebrand itself.
In these cases the pin number will usually stay the same, but the new debit card will need to be activated. Once the card is activated, the old card will no longer function.
