One of the major banking institutions in the world recently announced that it had decided not to sell its retail credit cards, in a move that many believe is a positive sign for the industry.
The Wall Street Journal reports that Citigroup’s retail credit card portfolio, which includes partnerships with The Home Depot, Zales, Sears and others will be kept in-house, rather than sold off to the highest bidder. This is due, according to some, to a more confident customer base, which is spending more money than in previous times.
The news source reports that many credit card issuers jumped onto the bandwagon years ago when spending was higher. According to some industry experts, issuing cards at these stores still carries some risk.
“As a general rule of thumb, you’d expect a higher loss rate on a private-label credit card,” said Leigh Allen, a managing director with consulting firm Kessler Group. “You’re also charging a much higher interest rate.”
In other credit card industry news, Capital One announced this summer that it would be purchasing HSBC Holdings PLC’s U.S. card unit for a price of $2.3 billion.Back To Blog