Is the Private-label Credit Card Market in the US on the Rise?

The private-label credit card market in U.S., has witnessed ups and downs after the great recession of 2008. The number of private-label credit card (PLCC) took a nosedive in 2010, but after 2010, we have seen a steady growth in private-label credit cards in U.S. In 2012, the number of PLCC accounts exceeded the 175 million mark. At present there are more than 190 million PLCC accounts in US.

What is a private label credit card?

Private label credit cards are cards branded for a specific retailer, independent dealer or manufacturer. The PLCC card is issued by a bank. PLCC cards can be a dual card where a card network is associated with it.

Retailers like Nordstrom, Shell, Best Buy and BJ's Wholesale Club are few top merchants which has large number of PLCC accounts. Nordstom has around 30 million accounts, Shell (24 million), Best Buy (7 million) and BJ Wholesale Club (9 million). Other prominent retailers that have a strong presence in PLCC market in US are Sears Holdings, J.C. Penney, Macy's, GameStop, Kohl's, Chevron, Toys "R" Us and Target.

PLCC cards are mainly issued by Synchrony Bank, Comenity Bank, Citibank, Barclaycard, World’s Foremost Bank, Alliance Data, Citibank, U.S. Bank and TD Bank. Synchrony Bank is clearly the leader in PLCC in US with a market share of more than 40%. There are several PLCC cards that are dual cards. Nordstrom, Old Navy, American Eagle Outfitters, Ann Taylor, AT&T, Banana republic, Bed Bath & Beyond and Best Buy are few of the retailers that have dual PLCC cards. These cards are issued in partnership with card networks like Visa and MasterCard.

Key trends in Private label credit cards market in US

- According to some market research, nearly 43 percent of U.S. adult consumers own at least one co-branded or affinity credit card.

- Entry of new players – Players like Capital One, TD Bank and Wells Fargo have entered into PLCC. Players like Citi, Alliance Data and Synchrony are leaving no stones unturned to gain a significant market share.

- Major banks like Chase, Citi and Bank of America are losing the battle with millennials. Brand is something which millennials still value. So bringing PLCC cards in partnership with major brands is something that is in minds of traditional financial institutions.

- Major payments systems like Samsung Pay and Apple Pay have integrated private-label credit cards. This integration have turned out to be immensely valuable for the PLCC ecosystem.

Let’s Talk Payments is publishing a report on PLCC. The report talks about major PLCC cards in US.

Table of Content:

- Major PLCC cards in US

- Issuing bank and card network partnerships (database)

- PLCC accounts by major retailers (database)

- Trends