Store-Branded Credit Cards Draw Profits, Unlike The Rest Of Retail

Amid the brick-and-mortar woes of retailers such as Macy’s, is there a silver lining to be spun from credit cards?

The New York Times reports that department store operators are leaning into a “hard sell” that looks to get cards unloaded at the register, luring consumers with discounts on goods as diverse as clothing and furniture. The cards, with high interest rates, are a means for retailers to pursue an end: black ink on bottom lines.   

The dependence on the cards comes amid a well-publicized battle as retailers face a juggernaut in the form of Amazon. The cards may be … well, a house of cards, built on what the NYT said exists as “a shaky foundation.” All it takes is for consumers to start lagging in payments, and then the foundation is one of quicksand.   

In one example, Macy’s branded cards were 39 percent of total profits seen in 2016 of $1.9 billion, up from a 26 percent contribution just four years ago. Over the same time frame, Kohl’s garnered 35 percent of its net income versus 23 percent previously. The cards typically feature interest rates of about 30 percent, which is roughly twice the rate levied on other accounts.

But a warning sign has come from Synchrony Financial, which, as a major lender in the space, has said it must provision for more losses.


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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Digital Fraud Tracker Report

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