The first credit card I got was Macy’s in 1977. The plastic was a source of pride and I still remember the full account number by heart. The account number was only nine digits so it was not as hard as a bank card number, but I knew it just in case. I still shop at Macy’s, though now use bank cards.
That is the same affection card issuers hope to gain in co-branding, which this piece from CNBC highlights today. The article points out:
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Apple and Goldman Sachs are planning a new credit card to be introduced as early as next year, The Wall Street Journal reported, citing people with knowledge of the process.
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The move comes as investment bank Goldman continues to make a push into consumer banking activities such as deposit-taking and personal loans. It will displace London-based Barclays as Apple’s financial partner for credit cards, the Journal said.
You will get much more detail out of the recently published Mercator Viewpoint on Goldman Sachs at this link but suffice to say, co-branded cards target their natural markets. If you are a millennial, Apple, Ikea, and Uber are likely on your list. Homeowners gravitate towards Home Depot. Price conscious shop at Kohls. It gets obvious after looking at a handful.
Bank issuers such as American Express, Chase and Citi have the girth to deliver iconic brands, but programs by Comenity and Synchrony cover more than 250 retailers.
The cards offer nice reward opportunities, but transact rather than revolve; the rates are often 500 basis points beyond the street rate of general purpose cards!
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group