Target has No Plans to Sell Credit Card Business

by Mike Bevel, CollectionIndustry.com

If your plans for the upcoming holiday season included purchasing Target?s credit card business for yourself or a loved one ? hold up. Target Corp. said today that it has no plans to be like other retailers and sell its credit card business. It generates big profits and drives stronger store sales, according to the company.

The discount retailer, which offers both a Target Visa and another card that can be used only at its stores, is among the top 10 credit card issuers in the United States.

“For those of you who perceive a high degree of risk in our operations (because of) this enterprise…selling these operations is not going to eliminate that perception,” Doug Scovanner, Target’s chief financial officer, said in a presentation to investors on Friday.

That risk Scovanner mentions comes from analysts, who have raised concerns that a slowing housing market and recent regulations that increased minimum credit card payment amounts could lead to an increase in bad debt.

Target said it turns down some 45 percent of those who apply for a Visa card, and its cardholders have unusually high credit scores.