October 31, 2019 2 min to read
Private label: how to start your own credit card company
Category : Finance
Are you looking to bite into one of America’s largest financial services market?
Considering that the average American has a credit card balance of over $6,000 and the total credit card debt held by Americans has hit $1 trillion, starting a credit card company can be a potentially lucrative move.
What’s more, your company can focus on offering private label credit cards, which allows holders to use it only in specific stores.
Ready to learn what it takes to create your own credit card company?
Read on to find out.
Understand How Private Label Credit Cards Work
The credit card industry is fiercely competitive, with leading players like Bank of America, American Express, Chase and Citibank holding almost impenetrable market shares.
As an entrepreneur aspiring to start a credit card company, it’s unlikely that you have the resources and expertise required to go head to head with these companies. This is why your best short is to start out a private label credit card company.
But how do private label cards work?
Let’s say you already have another small business. Don’t you have customers you allow to buy your goods or services on credit?
A private label credit card enables you to award your customers a line of credit, so they can shop on credit in your store. Also, these type of credit cards typically aren’t powered by card processing companies such as Visa and MasterCard.
However, you’ll need to partner with an established financial services company, such as a local commercial bank, to issue the cards to customers and collect payments.
Another option is to start a credit card company that focuses on offering private label credit cards to small businesses.
Research Your Target Market
Regardless of the business model you want to operate, it’s vital to do extensive research and establish whether there’s a substantial market for your business.
If you want to create a private label credit card for your store, for instance, you must determine whether your customers will warm up to your idea. You don’t want to pump a lot of money into creating a credit card only for your customers to shun it.
And if you want to start a credit card company that focuses on creating private label credit cards for small businesses, you need to establish whether the businesses you’re targeting will embrace the idea…
Continue reading the article and learn more about credit card companies on Verbiton.com.