Buying up private credit cards
Citigroup recently announced it was acquiring the credit card operations of the soon-to-be-merged May and Federated department stores for $750 million. The portfolios contain over $6 billion in debt.
This IS but the latest step in the land rush to acquire private label credit cards by big financial institutions. AT the same time, retailers have been getting rid of such cards, as being a non-essential part of their businesses that require large non-core staffs. As with May/Federated, the sell-off also gives a nice one-time boost to less than stellar earnings.
As the credit card industry matures and the expansion of regular bank credit cards slows, private cards are one of the few areas of growth left for big providers like Bank One, Citigroup, and General Electric. For example, Citigroup acquired Sears' credit card operations in 2003, as well as those of Home Depot. In 2004, GE Financial acquired the credit card operations of the Dillard's department store chain.. In 2004, Bank One bought the credit card operations of Circuit City. The list goes on, and the pressure is on the remaining retail companies to sell their operations.
9:58:00 PM 
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