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Credit Card Applications » News » Other » Target stops issuing Visa Cards in a effort to promote its own

Target stops issuing Visa Cards in a effort to promote its own

May 06, 2010 | Updated on May 06, 2010
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The content is accurate at the time of publication and is subject to change.

The second largest discount chain of stores in the United States, Target, has decided to curb the issuance of Visa incorporated credit cards and instead promotes its own card to new applicants.

The company, which has its head quarters in Minneapolis, said that there is a tendency that the guests might spend more through Target credit card as compared to the Target Visa card.

The decision will adversely affect the world's largest payment network, Visa, which is currently located in San Francisco. In the month of March, Macy's Incorporation made an announcement that said that the visa cards being used by them currently will make way for the credit cards from American Express Corporation that is currently based out of New York.

The retailer, Target, went on to mention that the new applicants who qualify for credit cards will be provided the Target card that can be used online on their website, in addition to all the Target stores. The current consumers who hold Target visa card will not be impacted adversely.

The Nilson report, which is a newsletter related to the credit card industry, having its head quarters in New York mentioned that Target is the third largest company that issues visa credit cards to consumers. With an outstanding of over 23.9 million cards, Target is the third largest card issuing company in terms of purchases.

The financial analysts add that any increase in the profits of Visa will be stalled at the moment since Target accounts for nearly 1% of the total profits through Visa payment processing.

Tien-tsin Huang from JP Morgan Chase, who sent out a note to all consumers, said that this was a benign announcement.

Eric Hausman, the spokesperson for Target, said that about 70% of Target consumers have Visa credit cards and they account for over 95% of the total outstanding loans. This figure is all set to decline with Target making this huge change.

Denise Dunckel, the spokesperson for Visa, issued an email statement which said, "We respect Target's business decision to move ahead promoting their proprietary cards. We look forward to working with Target to provide existing Visa Target cardholders with the value they have come to enjoy."

As a test run, Target marketed two of its credit cards in the month of October, 2009. The campaign that was conducted in the 1,740 Target stores in the United States clearly showed that the consumers who held Target cards ended up spending more shopping that the consumers who held Target Visa cards.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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