Private Label Credit Cards Market in the United States: Late Fees are Single Largest Driver of Profitability for Monoline Private Label Issuers
Wednesday, November 29, 2023
DUBLIN, Nov. 21, 2023 /PRNewswire/ -- The "Private Label Credit Cards in the U.S., 13th Edition" report has been added to ResearchAndMarkets.com's offering.
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After experiencing declining transaction volumes in 2018-2020, the private label credit card market rebounded in 2021 and 2022. This growth trend is expected to continue through 2025, with nominal purchase volume and card outstandings projected to increase by 9.8% and 9.7%, respectively, during the period.
The report identifies six major private label credit card issuers: Synchrony Financial, Citibank's Citi Retail Services, Capital One, TD Bank, Bread Financial, and Wells Fargo. These issuers are forecasted to reach a purchase volume of $339.9 billion and card outstandings of $172.9 billion by 2025.
While Buy-Now, Pay-Later (BNPL) loans have impacted credit card purchase volume, the private label card industry continues to thrive due to customer loyalty and additional revenue associated with store credit cards. Private label card issuers and merchants have introduced new products, such as medical credit cards, and integrated private label BNPL and credit cards into their product offerings.
Medical credit cards, a niche segment, are offered by three private label credit card issuers: Synchrony, Bread Financial, and Wells Fargo. Synchrony's CareCredit Credit Card is the largest product in this market, with significant growth from 4.4 million cardholders and 177,000 providers in 2013 to 11.7 million cardholders and over 250,000 enrolled healthcare providers in 2023.
Despite these positive developments, the private label credit card industry faces challenges, including higher debt charge-off and delinquency rates, rising interest rates on unpaid balances, and potential caps on late fees, which could impact profitability.
The report also discusses the aggressive regulation of late fees by the Consumer Financial Protection Bureau (CFPB), which could lead to the elimination of a significant portion of issuer income. While late fees are a major driver of profitability, credit card issuers are challenging the CFPB's proposed $8 late fee cap, citing its potential adverse effects.
Key Topics Covered:
CHAPTER 1: EXECUTIVE SUMMARY
-- Context for Market Performance
-- Key Challenges Facing the Private Label Credit Card Market
-- A Third of Consumers Regret Signing up for Private Label Credit Cards
-- Market Share Loss to BNPL
-- Rising Charge-Off Rates
-- Private Label Credit Card Interest Rates
-- Aggressive Regulation of Late Fees by the CFPB
-- Card Issuers Were Given a Late Fee Carve Out - That May Be Disappearing
-- New CFPB Late Fee Regulation Could Eliminate $9 Billion of Issuer Income
-- Late Fees Disproportionately Hit Subprime Borrowers
-- Late Fees are Single Largest Driver of Profitability for Monoline
Private Label Issuers
-- Market Size and Growth
-- TOP PRIVATE LABEL CREDIT CARD ISSUERS
-- Bread Financial (formerly Alliance Data Systems)
-- Capital One
-- Citi Retail Services
-- Synchrony Financial
-- TD Bank
-- Wells Fargo
-- Turnkey PLCC Platform is Central to Wells Fargo Strategy
CHAPTER 2: MARKET SIZE AND GROWTH
-- MARKET BACKGROUND
-- Private Label Credit Cards Were First Consumer Credit Products
-- Retailers Sell Credit Card Portfolios to Financial Services Firms
-- Major Retailer Benefits: Data and Loyalty
-- Major Cardholder Benefit: Buying Power
-- DRIVERS OF RETAIL AND PRIVATE LABEL CREDIT CARD PERFORMANCE
-- Growing the Market for Private Label Cards with New Products
-- Medical Credit Cards
-- Bread Financial and Wells Fargo Offer Medical Cards
-- Medical Private Label Credit Cards Help Consumers Address Large
Deductibles
-- MARKET PERFORMANCE
-- Context for Market Performance
-- Pandemic, Supply Chain, and Inflation All Exert Negative Pressure on
Retailers
-- PLCC Receivables Have Declined While Purchase Volume Has Grown
Significantly
-- Broad Retail Adoption of BNPL Poaches from Private Label Credit
Cards
-- Retailers' Loyalty Programs Increasingly Separate from PLCC
Enrollment
CHAPTER 3: PROFILES OF TOP PRIVATE LABEL CREDIT CARD ISSUERS
-- Bread Financial
-- Capital One
-- Citi Retail Services
-- Synchrony Financial
-- Wells Fargo
CHAPTER 4: PROFILES OF SELECTED PRIVATE LABEL CREDIT CARD AND LOYALTY PROGRAMS
-- American Eagle
-- Best Buy
-- Forever 21
-- Home Depot
-- Kohl's
-- Macy's
-- Target
CHAPTER 5: PRIVATE LABEL CARD USAGE TRENDS
For more information about this report visit https://www.researchandmarkets.com/r/etei8g
About ResearchAndMarkets.com
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SOURCE Research and Markets
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