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PUBLISHER: Packaged Facts | PRODUCT CODE: 1319875

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PUBLISHER: Packaged Facts | PRODUCT CODE: 1319875

Private Label Credit Cards in the U.S., 13th Edition

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PAGES: 112 Pages
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Packaged Facts, a leading provider of consumer-oriented market research and analysis, today announced the launch of its new report "Private Label Credit Cards in the U.S., 13th Edition," offering a deeply detailed analysis of the shifting strategies and emerging opportunities and challenges confronting private label card issuers and their merchant partners.

Rebounding from declining transaction volumes in 2018-2020, the private label credit card market experienced growth in both 2021 and 2022. Growth will continue through 2025 with private label credit card nominal purchase volume growing a total of 9.8% through 2025 and card outstandings growing a total of 9.7% during the period."

For the six largest private label credit card issuers (Synchrony Financial, Citibank's Citi Retail Services, Capital One, TD Bank, Bread Financial and Wells Fargo), purchase volume will total $339.9 billion in 2025 and card outstandings will reach $172.9 billion in 2025.

Revitalizing growth is coming to the payment segment from both medical credit cards and new credit bundlings providing small to mid-sized merchants private label credit cards and buy-now, pay-later (BNPL) financing through point-of-sale.

In the past five years, Buy-now, pay-later (BNPL) loans have offered buyers zero-interest short-term installment loans that have created windshear for both network-branded and private label credit cards. Packaged Facts estimates displacement of credit card purchase volume by BNPL totaled $143 billion in 2021 and will reach $279 billion in 2023.

Product Code: LA18086933

Table of Content

CHAPTER 1: EXECUTIVE SUMMARY

SCOPE OF REPORT

REPORT METHODOLOGY

Context for Market Performance

Table 1-1. Consumer Interest in Applying for a Store Credit Card During the Holiday Season, 2018 -

2022 (%)

Table 1-2. Total Number, Value and Dollar Average of Private Label Credit Card Payments, 2015,

2018, and 2021 (number in billions; $ in trillions)

Key Challenges Facing the Private Label Credit Card Market

A Third of Consumers Regret Signing up for Private Label Credit Cards

Market Share Loss to BNPL

Rising Charge-Off Rates

Private Label Credit Card Interest Rates

Table 1-3. General Purpose Credit Card and PLCC Interest Rates, 2018 - 2022 (%)

Aggressive Regulation of Late Fees by the CFPB

Card Issuers Were Given a Late Fee Carve Out - That May Be Disappearing

New CFPB Late Fee Regulation Could Eliminate $9 Billion of Issuer Income

Late Fees Disproportionately Hit Subprime Borrowers

Late Fees are Single Largest Driver of Profitability for Monoline Private Label Issuers

Market Size and Growth

Table 1-4. Outstandings, Private Label Credit Cards, Largest Issuers, 2019 - 2022 ($ in billions)

Table 1-5. Purchase Volume, Private Label Credit Cards, Largest Issuers, 2019 - 2022 ($ in billions)

TOP PRIVATE LABEL CREDIT CARD ISSUERS

Bread Financial (formerly Alliance Data Systems)

Figure 1-1. Bread Financial: Full Year Credit Sales by Product, 2022 (%)

Capital One

Citi Retail Services

Synchrony Financial

TD Bank

Wells Fargo

Turnkey PLCC Platform is Central to Wells Fargo Strategy

CHAPTER 2: MARKET SIZE AND GROWTH

MARKET BACKGROUND

Private Label Credit Cards Were First Consumer Credit Products

Retailers Sell Credit Card Portfolios to Financial Services Firms

Major Retailer Benefits: Data and Loyalty

Major Cardholder Benefit: Buying Power

DRIVERS OF RETAIL AND PRIVATE LABEL CREDIT CARD PERFORMANCE

Growing the Market for Private Label Cards with New Products

Medical Credit Cards

Bread Financial and Wells Fargo Offer Medical Cards

Medical Private Label Credit Cards Help Consumers Address Large Deductibles

MARKET PERFORMANCE

Context for Market Performance

Pandemic, Supply Chain, and Inflation All Exert Negative Pressure on Retailers

PLCC Receivables Have Declined While Purchase Volume Has Grown Significantly

Table 2-1. Outstandings, Private Label Credit Card, Largest Issuers, 2019 - 2022 ($ in billions)

Table 2-2. Purchase Volume, Private Label Credit Cards, Largest Issuers, 2019 - 2022 ($ in billions)

Broad Retail Adoption of BNPL Poaches from Private Label Credit Cards

Retailers' Loyalty Programs Increasingly Separate from PLCC Enrollment

CHAPTER 3: PROFILES OF TOP PRIVATE LABEL CREDIT CARD ISSUERS

THE TOP ISSUERS

Table 3-1. Purchase Volume, Private Label Credit Cards, Largest Issuers 2019 - 2022 ($ in billions)

SYNCHRONY FINANCIAL

Overview

Table 3-2. Synchrony's Key Performance Metrics by Sales Vertical, 2022 ($ in billions)

Leveraging Synchrony's Bank for Lower Cost Funding

Despite Broad Range of Customers, Synchrony Dependent on its 5 Largest Programs

    • Table 3-3. Synchrony New and Renewed Partnerships,

Dual Cards are Focus of Sales Development

Operating Segments Replaced by Industry Sales Platforms for Financial Reporting

    • Figure 3-1. Synchrony's Key Performance Metrics by Sales Vertical,

Home & Auto

Figure 3-2. Mattress Firm 3% Rebate Platformed on Synchrony Store Card

Digital Vertical

Diversified & Value

Health & Wellness

CareCredit Drives New Partnerships and Transaction Volume

Roll-up of Specialized Human and Veterinary Care Benefits Synchrony

CareCredit is Driving Growth

CareCredit Cardholders Can Move to Longer Term Financing

Digital Merchants and Revitalizing Retail Category Bode Well for Synchrony

Synchrony's Expansion into BNPL

Table 3-4. Synchrony Financial, Receivables and Purchase Volume, 2019 - 2022 ($ in billions)

CITI RETAIL SERVICES

Overview

Table 3-5. Citi Retail Services, Private Label Credit Cards: Outstandings and Purchase Volume, 2019 -

2022 ($ in billions)

Activity and Acquisitions

New Business: Citi Pay Credit

Snapshot: Best Buy

Table 3-6. Best Buy, US Segment Performance, 2020 - 2022 ($ in billions)

Declining Revenue Tackled with New Business Lines and Loyalty Program Enhancements

New Business: Best Buy Health

Best Buy Loyalty Tiers Integrated with Store Credit Card Program

Best Buy Financing Available to Best Buy Cardholders

CAPITAL ONE

Overview

Table 3-7. Capital One Domestic Credit Cards: Purchase Volume and Outstandings and Purchase

Volume, 2020 - 2022 ($ in billions)

Table 3-8. Capital One Private Label Credit Cards: Purchase Volume and Outstandings, 2020 - 2022 ($

in billions)

    • Capital One Showing Strong Growth in

Program Partners

Kohl's

BREAD FINANCIAL

Overview

Figure 3-3. Bread Financial: Full Year Credit Sales by Product, 2022 (%)

    • Strong Credit Sales in 2022 Lay Foundation for Strong

Bread's PLCC Portfolio is Increasingly Concentrated

    • Figure 3-4. Bread Financial Loans by Payment Product and Brand Partner,

Data Drives Loyalty Programs

Younger Consumers Use Mobile for Shopping and Stores for Buying

    • Figure 3-5. Use of Payment Products Morph from Budget to Rewards by Age Cohort,

Bread Financial Rebrands Direct to Consumer Banking

Bread is Promoting is Branded Payment Products

New Credit Card - Bread Cashback American Express

BNPL - Bread Pay BNPL

Bread in POS Installment Loan Business

Figure 3-6. Bread Buy-Now, Pay-Later Installment Loans

Business Strategy

Table 3-9 Bread Financial Private Label Credit Card Purchase Volume and Loan Receivables, 2020 -

2022 ($ in billions)

An Evolving Client Base

Key Positioning: Primary Marketing, Loyalty, and Payment Services Provider

Other Competitive Strategies

Private Label Credit Card Partners

WELLS FARGO

Overview

Turnkey PLCC Platform is Central to Wells Fargo Strategy

Decline of PLCC Metrics, Followed by Rebound

Table 3-10. Wells Fargo, Purchase Volume and Receivables, 2019 - 2022 ($ in billions)

Six Turnkey PLCC Financing Solutions

TD BANK

Overview

Table 3-11. TD Bank, Purchase Volume and Receivables, 2019 - 2022 (USD$ in billions)

TD Bank Acquisitions and Extensions

Nordstrom

TD Bank's Largest Partner is Target

Figure 3-7. Target Revenue, 2019 - 2022 ($ in billions)

Other Partners

CHAPTER 4: PROFILES OF SELECTED PRIVATE LABEL CREDIT CARD AND LOYALTY PROGRAMS

AMERICAN EAGLE

Overview

American Eagle Sub-Brands Generating Profits

Positive Performance Build atop Previous Results

Real Rewards Loyalty

    • Table 4-1. AEO Real Rewards Tiers: Program Saves Best Rewards for its PLCC Cardholders,

The App for Real Rewards

BEST BUY

Overview

Table 4-2. Best Buy, US Segment Performance, 2020 - 2022 ($ in billions)

Declining Revenue Tackled with New Business Lines and Loyalty Program Enhancements

Best Buy Health

Loyalty Tiers Integrated with Store Credit Card Program

Best Buy Financing Available to Best Buy Cardholders

  • FOREVER

Overview

Forever Rewarded Loyalty Program Only for Its Cardholders

HOME DEPOT

Overview

Table 4-3. Home Depot Net Sales Growth, 2018 - 2022 ($ in billions)

Home Depot Cautious About Sales Growth Momentum

Private Label Credit Cards

Table 4-4. Home Depot Private Label Credit Card Volume, 2020 - 2023 ($ in billions)

Home Depot Credit Card Promotions

Pro Xtra Credit Card

    • Figure4-1. Home Depot, Rewards Tiers for PLCC,

KOHL'S

Overview

Table 4-5. Kohl's Net Sales and Private Label Credit Card Revenue, 2020 - 2022 ($ in billions)

Strategic Focus

Kohl's and Sephora

Kohl's Loyalty Programs

Loyalty Built on Discounts and Frequent Communication

Rewards Program Drives Revenue

The Kohl's App: Driving Sales Lift

MACY'S

Overview

    • Table 4-6. Macy's Key Financial Metrics, PLCC Performance, 2020 -

Off-Mall May Be Key for In-Store Growth

Digital Drives Sales as Omnichannel and Standalone Channel

Loyalty and Star Rewards

Macy's Private Labeled Credit Cards

TARGET

Overview

Figure 4-2. Target Annual Revenue, 2019 - 2022 ($ in billions)

The RedCard Juggernaut

Target Circle Brings Non-RedCard Shoppers into Marketing Engine

RedCard and Circle are in Tension

Table 4-7. Target Key Financials and PLCC Purchase Volume, 2020 - 2022 ($ in billions)

Circle Loyalty Program is Focus of Heavy Promotion

TD Bank Issues the Target RedCards

CHAPTER 5: PRIVATE LABEL CARD USAGE TRENDS

PRIVATE LABEL CREDIT CARD RECENTLY USED

Table 5-1. Gender of Private Label Credit Cardholders, 2023 (# and %)

Table 5-2. Highest Level of Education Completed, High School through Some College, Private Label

Credit Cardholders, 2023 (# and %)

PLCC Ownership by Higher Education Degree Holders

Table 5-3. Highest Level of Education Completed, College and Higher Levels of Education Degrees,

Private Label Credit Cardholders, 2023 (# and %)

Table 5-4. Private Label Credit Cards, Household Income of Cardholders, 2023 (% and #)

APPENDIX

TERMS AND DEFINITIONS

Have a question?
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Jeroen Van Heghe

Manager - EMEA

+32-2-535-7543

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Christine Sirois

Manager - Americas

+1-860-674-8796

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