Like the broader consumer credit cardmarket, private label retail cards show signs of improving delinquencies. Some see this as an early indicator of an upturn in retailer programs, and thesmall segment of third party issuers that service these clients. Recentreports from two direct issuers were promising:
On Wednesday,Target reported second-quarter profit of $149 million for its credit-cardsegment, up from $63 million a year earlier, as souring loans receded. Accountsat least 60 days behind on credit-card payments fell to 5% from 5.8% a yearearlier.
Nordstrom’s cardusers paid back 27% of their balances on average in July, up 1.52 percentagepoints from a year earlier.
The private label segment is gainingattention from issuer Capital One:
Corp. earlier thismonth said it would offer private-label credit-cards to new and existingcustomers of retailer Kohl’s Corp. Under the seven-year deal, Capital One willinherit Kohl’s 20 million credit-card accounts from J.P. Morgan Chase & Co.
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