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The U.S. Market for Private Label Credit Cards, 5th Edition


Attention: There is an updated edition available for this report.

In a few short years, the private-label credit card market has seen a near total shift in the control of card portfolios; with very few exceptions, retailers have given up on in-house control, and have unloaded their private-label programs on third-party issuers. After a string of enormous acquisitions, including the 2005-06 purchase of the receivables of the newly merged Federated and May Department Stores, Citi Commerce dwarfs the rest. Yet second-tier players GE Money, HSBC, and Alliance Data have also made notable acquisitions and expansions—and even J.P. Morgan Chase & Co., barely on the radar in 2004, essentially doubled its receivables with the 2006 acquisition of Kohl’s retail card program.

By themselves, none of these deals have increased the overall size of the market, but they have freed retailers to focus on their core businesses, to explore ways to attract cardholders, and to experiment with more ambitious reward and loyalty programs. At the same time, most of the third-party bank issuers have increased their investment in behind-the-scenes services for their retail card partners, offering more assistance with everything from marketing and advertising to rewards administration and customer service. As a result, the market has exceeded earlier growth predictions, with surprising gains in 2004 and 2005 and continued growth in store for the near future.

Private Label Credit Cards in the U.S. focuses on the $106 billion private-label credit card industry, covering cards issued directly by retailers as well as cards issued by third parties, with some discussion of oil & gas cards managed by third-party issuers. The report examines ongoing trends in the private-label market—including rapid consolidation among market leaders, the seemingly inevitable decline of proprietary card programs, and the private-label market’s embrace of trends and tactics made popular in the general-purpose segment, especially co-branded cards and rewards programs. It also explores the state of private-label card marketing and advertising, the influence of card processors on the retail card market, and the impact of new technology on private-label card account generation and administration. Also included are detailed company profiles of the leading bankcard associations and card issuers—including Citi Commerce Solutions, GE Money, HSBC, Alliance Data, and J.P. Morgan Chase & Co.—as well as a survey of the demographics, shopping habits, and consumer attitudes of private-label credit card holders.

Report Methodology
The information in Private Label Credit Cards in the U.S. is based on both primary and secondary research. Primary research involved interviews with marketing, public relations and industry analysts within the banking, retail and credit card markets and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature, annual reports and 10(k) filings, and data from databases such as CardSource.

What You’ll Get in this Report
Private Label Credit Cards in the U.S. makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Private Label Credit Cards in the U.S. offers.

Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

How You Will Benefit from this Report
If your company is already doing business in the private label credit market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for private label credit cards, as well as projected markets and trends through 2010.

This report will help:

  • Marketing Managers identify market opportunities and develop targeted promotion plans for private label credit cards.
  • Research and development professionals stay on top of competitor initiatives and explore demand for private label credit cards.
  • Advertising agencies working with clients in the banking and retail industries understand the product buyer to develop messages and images that compel consumers to use private label credit cards.
  • Business development executives understand the dynamics of the market and identify possible partnerships.
  • Information and research center librariansprovide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.


  • Executive Summary
    • Scope and Methodology
      • Scope of Report
      • Report Methodology
    • Introduction
      • Private-Label Card Basics
      • Private-Label Card Benefits
      • Third-Party Issuers Dominate Market
    • The Market
      • Market to Top $131 Billion in 2010
        • Table Projected U.S. Market for Private-Label Credit Cards, 2005-2010 (in billions of dollars)
      • Mature Market Has Capacity for Surprise
      • Leaders Find Innovative Ways to Drive Growth
      • Lower Tiers Remain Focused on Smaller, Specialty Retailers
    • The Marketers
      • Top Private-Label Issuers Control Most of the Market
        • Table Market Share of Top Marketers of Private-Label Retail Cards: 2005 (percent)
      • The Leading Payment Processors
      • Overlapping Roles of Issuers, Acquirers, Processors
      • The Leading Oil Company Card Programs
      • Competition for Private Label on Many Levels
      • Consolidation Drives Market
      • Strategic Partnerships Remain Essential
      • Shifts in Basic Private-Label Marketing
    • The Consumer
      • 18% Penetration Level for Department Store Cards
        • Table Household Penetration Rates for Selected Credit Card Classifications: Have or Use, Used in Last Year, and Used in Last Month, 2005 (U.S. households)
      • 73% Frequent Usage Level for Gasoline Cards
      • Older Households, Heavier Users
      • Clothing/Specialty Cardholders Are Most Avid Shoppers
    • Looking Ahead
      • Third-Party Issuers Dominate: Now What?
      • Smaller Merchants, Larger Issuers
      • Reaching Ethnic Populations
        • Table Purchasing Power of U.S. Minorities: 1990, 2000, 2005, and 2010 (in billions of dollars)
      • New Applications of Technology
  • Introduction
    • Private-Label Card Overview
      • Scope of Report
      • Private-Label Card Basics
      • Private-Label Card Benefits
      • Third-Party Issuers Dominate Market
    • Private-Label Risks, Rewards, and Innovation
      • Changes in Credit Good News for Retail Card Issuers
      • Major Issuers Focus on CRM, Co-Branding, Rewards
      • Consolidation Nears Its Limit
      • Expanding Online Ventures
      • Other New Technology
    • The Regulatory Environment
      • Repercussions of Anti-Trust Rulings
      • Merchants Pushing for More
      • EFT, Acquirers, and Consolidation
  • The Market
    • Market Size and Composition
      • Note on Methodology
      • Market Approaches $106 Billion in 2005
        • Table U.S. Market for Private-Label Credit Cards, 2001-2005 (in billions of dollars)
      • Private-Label About 15% of Total Card Market
      • Proprietary Cards Generate Low Volume But Big Transactions
    • Factors to Market Growth
      • Mature Market Has Capacity for Surprise
      • Leaders Find Innovative Ways to Drive Growth
      • Lower Tiers Remain Focused on Smaller, Specialty Retailers
      • Room to Grow in Online Purchasing
      • Competing with Debit
      • Trickle-Down Effects of Bankruptcy Law Reform
      • Buying Power of Minority Populations Continues to Skyrocket
      • New Products, Promotions, and Possibilities
    • Projected Market Growth
      • Market to Top $130 Billion in 2010
        • Table Projected U.S. Market for Private-Label Credit Cards, 2005-2010 (in billions of dollars)
  • The Marketers
    • Overview
      • Increasing Rate of Consolidation
      • The Leading Payment Processors
      • Overlapping Roles of Issuers, Acquirers, Processors
      • The Leading Oil Company Card Programs
        • Table U.S. Private-Label Credit Card Market: Selected Marketers and Brands
    • Marketer Shares
      • Top Private-Label Issuers Control Most of the Market
        • Table Market Share of Top Marketers of Private-Label Retail Cards: 2001 (percent)
        • Table Market Share of Top Marketers of Private-Label Retail Cards: 2005 (percent)
        • Table Top Marketers of Private-Label Retail Cards: Estimated Receivables and Market Share, 2001, 2003, and 2005 (in millions of dollars)
      • Room to Grow, But Not to Move
    • The Competitive Situation
      • Competition for Private Label on Many Levels
      • Consolidation Drives Market
      • Strategic Partnerships Remain Essential
      • In-House Control Losing Appeal-Again
    • Marketing Trends
      • Shifts in Basic Private-Label Marketing
      • The Co-Branding Question: Ask Again Later
      • Rewards Programs Expected, But in What Form?
      • Flexibility Still Key, For Consumers and Businesses
      • Technology Boosts Brand, Card Awareness
      • Advertising Trends
  • Competitor Profiles
    • Competitor Profile: Alliance Data (Alliance Data Systems Corp.)
      • Corporate Overview
      • Steady Growth in Partners and Services
      • New Experiments in Co-Branding
    • Competitor Profile: Citi Commerce Solutions (Citigroup, Inc.)
      • Corporate Overview
      • Federated Deal Brings Massive Gains
      • Gasoline Card Leader
      • Old Tactics Still Predominate
      • Tops in Hispanic Outreach
    • Competitor Profile: First Data Commercial Services (First Data Corp.)
      • Corporate Overview
      • Major Deals with Citi, GE, Discover
    • Competitor Profile: GE Money (General Electric Co.)
      • Corporate Overview
      • Acquisitions, Partnerships, and New Products
      • Innovation in Online Payments
      • IKEA Tests New Technology
    • Competitor Profile: HSBC Retail Services (HSBC North America, Inc.)
      • Corporate Overview
      • Neiman Purchase Boosts Private-Label Prestige
      • Opportunity for Growth in Consolidating Market
    • Competitor Profile: J.P. Morgan Chase & Co.
      • Major Bank, Minor in Market
    • Competitor Profile: Shoppers Charge Accounts Co. (Hudson United Bancorp)
      • Corporate Overview
      • Full Service for Smaller Operations
      • Expanding Services
    • Competitor Profile: Target Financial Services (Target Corp.)
      • Corporate Overview
      • New Formats, New Opportunities
      • Pioneer with New Technology
    • Competitor Profile: Total System Services, Inc.
      • Corporate Overview
      • Mixed Results in 2006
  • The Consumer
    • The Private-Label Cardholder: Introduction
      • Simmons Market Research Bureau Data
      • 18% Penetration Level for Department Store Cards
        • Table Household Penetration Rates for Selected Credit Card Classifications: Have or Use, Used in Last Year, and Used in Last Month, 2005 (U.S. households)
      • 73% Frequent Usage Level for Gasoline Cards
        • Table Percentage of Overall Card Users Who Use Cards Monthly: Selected Credit Card Classifications, 2005 (U.S. households)
      • Private-Label Household Penetration Holds Steady
        • Table Household Penetration Rates for Selected Credit Card Classifications: By Use in Last Year, 2003-2005 (U.S. households)
    • Consumer Focus: Overview of Demographics
      • Older Households, Heavier Users
      • Women Lead in Private-Label Card Use
      • Minorities Far Below Norm for Most Card Categories
      • Broad Geographic Distribution for Card Use
      • Upscale Skew for Specialty Stores
      • Skew to Two-Person Households
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Adult Age Bracket, 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Adult Age Bracket, 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Gender, 2005 (U.S. households) Classification Female Male
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Race/Ethnicity, 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Region, 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Region, 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Household Income Bracket (in Thousands), 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Household Income Bracket (in Thousands), 2005 (U.S. households)
        • Table Indices for Use of Selected Credit Card Classifications in Last Year: By Household Size, 2005 (U.S. households)
    • Consumer Focus: Cardholder Attitudes
      • Clothing/Specialty Cardholders Are Most Avid Shoppers
      • Other Store Card Users Less Extreme in Habits
      • Store and Sale Preferences Vary by Card Category
      • Shopping in Groups
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Really Enjoy Any Kind Of Shopping," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Go Shopping Frequently," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Will Travel Up To An Hour Or More To Shop At Favorite Store," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Will Travel An Hour Or More To Factory Outlet Stores," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Prefer To Buy Things On The Spur Of The Moment," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Tend To Spend Long Periods Of Time In Store Browsing," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I'm Usually Willing To Shop New Stores," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Use The Internet To Help Plan Shopping Trips," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Usually Am The First Among My Friends To Shop At A New Store," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Buy Goods Produced By My Own Country When I Can," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Only Go Shopping To Buy Something I Really Need," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "When Shopping, I Get What I Want And Leave," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "When I Shop I Visit A Variety Of Stores," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Prefer To Buy Products From Specialty Stores," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Prefer Shopping At Specialty Stores Because They Tend To Carry The Best Brands," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Head Right To The Clearance Rack When I Enter A Store," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I'm Drawn To Specific Stores; Don't Shop By Sales," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Prefer To Shop With My Friends," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I Prefer To Shop With My Family," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "When Shopping With Others, I Prefer Splitting Up," 2005 (U.S. adults)
  • Chapter Looking Ahead - Highlights
  • Looking Ahead
    • Trends and Opportunities
      • Third-Party Issuers Dominate: Now What?
      • Smaller Merchants, Larger Issuers
      • Reaching New Populations
        • Table Purchasing Power of U.S. Minorities: 1990, 2000, 2005, and 2010 (in billions of dollars)
        • Table U.S. Bankruptcy Filings, 2002-2006 (number)
      • New Applications of Technology
  • Addresses of Selected Marketers

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