Carrots for store credit card holders

Once home to consumers with higher risk profiles and higher chargeoff rates, store credit card volume and active accounts took a nosedive during the recession, as issuer portfolios groaned under the strain of bad debt and reduced customer engagement. But signs point to a private label turnaround. Deal-making activity suggests that private label card programs have become a more viable and stable income source for issuers; the payment card segment has been buoyed by a spate of deals that has invigorated market leader Citi Retail Services and has brought TD Bank and Capital One into the competitive mix.Packaged Facts’ consumer survey analysis also suggests that private label cards have turned a corner, with consumer usage penetration and engagement on the rise from 2010 lows. As store card issuers look to build their accounts, they will be threading promotions with discounts and rewards to catch consumers’ eyes. According to our survey findings, roughly half of store card users would be motivated to apply for a card if they received points for every dollar spent on the card or received a 5% everyday discount on all card purchases. Some 4 in 10 would be motivated by receiving a discount with the first card purchase or by receiving 0% financing for 12 months on purchases made with the card. Importantly, these carrots may also entice non-cardholders: for example, fully one-third of non-cardholders would be motivated to apply for a store card in return for a 5% everyday discount on all card purchases. For more information about Packaged Facts’ report on Private Label Credit Cards in the U.S., please see http://www.packagedfacts.com/Private-Label-Credit-7278869/