Private-Label Credit

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DEFINITION of 'Private-Label Credit'

A type of revolving-credit plan managed by a bank or commercial finance company. Private-label credit plans are managed for either retail or wholesale manufacturers, such as department and specialty stores. This type of program allows retailers to offer more lenient and extended terms to customers than they could otherwise.

INVESTOPEDIA EXPLAINS 'Private-Label Credit'

If a third party, such as a bank, manages a private-label credit program for a retailer or manufacturer, it will perform several functions. These include the issuance of cards, funding of credit and the collection of payments from customers. The criteria for credit are jointly established by the service provider and the retailer.

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