Is it Safe to Go Back to the Citi? Weighing in on Citibank’s Turmoil

by Mercator Advisory Group 0

Private label credit cards seem to be the cards commentators hate to love. In a recent (and somewhat bias) article focusing on the travails of the Citi credit card operation, a focus was on private label cards, and it was not a positive focus.

Private-label credit cards are not the same as standard credit cards. Also known as retailer credit cards, private label cards are issued through Citibank by a retail affiliate. They typically tend to attract a lot of “bad” credit because they only require a fair credit rating to obtain, they carry high APRs and they can only be used at the issuing retailer. In other words, these are not the credit cards that most consumers apply for.

In the end, after reporting higher-than-expected quarterly profits, Citibank decided to keep the entire private-label division on life support rather than burying it


There are several angles missed here:

First, private label cards have traditionally served first time borrowers and those with damaged credit histories, and are sometimes one of the few mainline credit opportunities available for these consumers.

Second, they are prized by retailers because they facilitate sales and can provide valuable loyalty data.

Third, as Citi reaffirmed, when managed well the programs represent a real business opportunity for issuers

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