Private Label Credit Card

DEFINITION of 'Private Label Credit Card'

A store-branded credit card that can only be used at that store. A private-label credit card is a type of revolving credit plan managed by a bank or commercial finance company for either retail or wholesale manufacturers, such as department and specialty stores. Private label credit cards do not carry a credit card logo such as Visa or Mastercard and cannot be used with other merchants.

The private label credit program allows retailers to offer more lenient and extended terms to customers than they could otherwise. Many stores offer private label credit cards to their customers to encourage them to spend more by offering the convenience of a credit card and deferred payment. In addition, when a customer makes a purchase with a private label credit card, they will usually earn loyalty rewards, such as a discount on a future purchase. In this way, a private label credit card can encourage repeat business and customer loyalty. Private label cards can also make shopping more convenient for customers through features such as receiptless returns.

BREAKING DOWN 'Private Label Credit Card'

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.

Private label credit cards are similar to other credit cards in that they charge interest if you carry a balance, charge a fee if your payment is late and have a grace period if you don’t carry a balance. They are also similar to other credit cards in that while private label credit cards do not carry a payment processor’s logo, they are still backed by a payment processor such as Visa. The payment processor makes it easy for stores to offer private label credit cards by offering cards that work with the store’s existing terminals and point-of-sale equipment.

Target is one of many retailers that offers a private label credit card as of 2014. Called the RedCard, it gives consumers 5% off all purchases at the point of sale, free shipping on all online purchases and an extra 30 days on top of the usual 90-day return window to get a refund for unwanted purchases. Similarly, Nordstrom offers a private label credit card that gives customers $20 off a $100 purchase on the day they apply plus points on each purchase that can be redeemed for future discounts. Target and Nordstrom also each offer Visa cards that offer store-specific benefits and can be used anywhere Visa is accepted.

RELATED TERMS
  1. Visa Card

    A credit, debit or prepaid card branded by Visa, a major payments ...
  2. Green Monday

    The second Monday in December, which is one of the most lucrative ...
  3. Loyalty Program

    A rewards program offered by a company to customers who frequently ...
  4. Manufacturer's Suggested Retail ...

    The amount of money for which the company that produces a product ...
  5. Zero-Floor Limit

    A retail authorization system in which all of a merchant's credit ...
  6. Co-branded Card

    Any credit card that is offered by a credit card company that ...
Related Articles
  1. Retirement

    Understanding Credit Card Interest

    Paying these rates can impact your disposable income and your investment returns.
  2. Credit & Loans

    Review: The Walmart Credit Card

    A high-interest card with no annual fee and some good rewards, the Walmart Credit Card is worth a look, especially if you regularly shop at Walmart.
  3. Credit & Loans

    Review: The VentureOne® Rewards Credit Card

    Capital One's VentureOne® Rewards Credit Card offers travelers no annual fee and a menu of perks.
  4. Credit & Loans

    What You Need To Know About EMV Credit Cards

    Finally, the U.S. is beginning to move to EMV credit cards. Here's how they'll keep us safer and what they won't fix.
  5. Budgeting

    Layaway Plans: Get The Goods Without Going Into Debt

    If using a layaway plan keeps you from having to use your credit card, it could be a smart move.
  6. Credit & Loans

    Do Customer Loyalty Programs Really Save You Money?

    Here is a look at what customers have to do to ensure that loyalty programs help them shop smarter.
  7. Credit & Loans

    Rewards Credit Cards

    If you have a very good credit rating, you will have your choice of rewards credit cards, so pick the one you will be able to use the most.
  8. Credit & Loans

    Store Credit Cards: Do The Incentives Pay Off?

    Check out the pros and cons behind store credit cards; they might actually help you save money.
  9. Entrepreneurship

    2 Key Tactics Retailers Use To Increase Sales

    Many companies use versioning and bundling to increase sales. These strategies can offer value to consumers, but they also mean higher costs.
  10. Credit & Loans

    10 Reasons To Use Your Credit Card

    There are several benefits to paying with credit instead of debit, if you use a credit card responsibly.
RELATED FAQS
  1. How can you pay your Walmart credit card?

    Holders of Walmart credit cards can make payments on their balances due by mail, online or at Walmart and Sam's Club stores. ... Read Full Answer >>
  2. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods ... Read Full Answer >>
  3. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
  4. How can you cancel your Walmart credit card?

    Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How to Close Your Walmart Credit ... Read Full Answer >>
  5. Does the Walmart credit card have an annual fee?

    The Walmart credit card does not charge annual fees to its cardholders. It does, however, have other fees associated with ... Read Full Answer >>
  6. How does NetSpend overdraft protection work?

    NetSpend offers overdraft protection that allows the account holder to make transactions or incur fees with amounts that ... Read Full Answer >>
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center