GE Considering Sale of Private Label Credit Card Portfolios

Perhaps the second time is the charm, as GE states that it is again considering sales of its loan portfolio, which includes its private label credit card portfolio. GE tried this unsuccessfully back in 2008. Private label credit cards are a joint venture between banks and their partners, which might include electronics retailers, department stores, or other merchants.

It can be a win-win for both partners as both banks and retailers see the private-label card portfolio as a way to drive incremental revenue and income growth. Currently, GE’s portfolio includes cards issued for Lowe’s, WalMart, and American Eagle Outfitter.

Banks like Citigroup are recommitting to private label cards after it scrapped an idea to sell its portfolio last year. Wells Fargo and Discover Financial Services are interested in getting in the business, with Capital One buying HSBC’s United States’ card business for $2.5 billion.  Although private label cards usually perform worse than general-purpose cards, losses have fallen with an improvement in overall credit card performance.

Source: http://blogs.wsj.com/deals/2012/06/11/ges-private-label-credit-cards-might-be-an-easier-sale-now/