Co-Branded Credit Cards in the US, 9th Edition
Packaged Facts, a leading provider of consumer-oriented market research and analysis, today announced the launch of its new report “Co-Branded Credit Cars in the US, 9th Edition,” offering a deeply detailed analysis of the industry specific dynamics affecting the performance of the largest co-branding partnership segments, consumers and the competitive and economic challenges shaping the industry.
Rebounding successfully from the COVID-19 pandemic downturns in purchase volume and revolving balances, by early 2021, the industry is fully recovered in 2023, with major firms – including Chase, Capital One, and Wells Fargo – all showing growth in their credit card outstandings between 2020 and 2022.
With the co-branded credit card market reflecting the economic health of multiple sectors – as well as the overall health – of the economy, key challenges still remain, including rising charge-off rates, rising interest rates and the impact of inflation, and aggressive regulation of late fees. In addition, co-branded credit cards are not optimizing their utility, as consumers are reluctant to use co-branded cards outside their featured brands.
In general, longer term payment trends – such as the switch from checks and cash to electronic payments – continue. Younger consumers in particular are not interested in using cash, with a third of those under 50 saying they never use cash.
In 2022, the top US co-branded credit card programs accounted for $757.9 billion in purchase volume. Costco led the pack, with retail, airline and hotel partnerships representing the rest of the leaders. In addition to Costco, leading retailers include Walmart, Amazon, and Target. Key airline partners are American Airlines, Delta, and United, while Marriott International is a key hotel partner.
Nonetheless, many large retailers offer both private label and co-branded cards, relying on the same issuer to handle both portfolios for consistency across new account acquisition initiatives, rewards accumulation paths, and customer service standards.
Consumer demographics show that 70% of adults have credit cards with nearly 30% holding co-branded cards. The most common type of co-branded cards are those affiliated with department stores, followed by Amazon/Prime, warehouse clubs and airline/hotel chain cards. What consumers want most of these cards – no matter where used and when – are no annual fees, 100% fraud protection, great customer service, and 0% interest on purchases for the first 12 months.