By Robin Sydel
Credit card companies are starting to drop merchant partners in their offers for co-branded credit cards, with credit card losses issuers faced, most of the time, through customer defaults. Co-branded landscapes are pretty bleak right now. The wall street Journal reported Tuesday that co-branded and affinity brands have become too expensive and have fallen out of favor from credit card companies as they try to reduce expenses amid late payments and delinquencies of credit card users.
JP Morgan Chase, for example, is dropping Starbucks Duetto Visa Card next week for not attracting enough credit card users to make co-branding between the two companies profitable. JP Morgan Chase has also recently dropped credit card deals with Avon Products, a beauty product retailer, as well as some universities and sports teams like the University of Maryland, National Hockey Leagues' New Jersey Devils and basketball teams Detroit Pistons and Orlando Magic
Among the banks dropping niche-appeal cards are Citigroup and the Bank of America Corp. Bank of America, for example. now has 4400 affinity cards, which is down from 5000 affinity cards previously.
Royal Bank of Canada is also dropping out of its deal with Starbucks for it's Canadian Loyalty card. Starbucks, like the other merchants left by credit card issuers says that they are looking for ways to retain their customers, and Starbucks is planning to introduce a new loyalty program soon.
VIA WSJ
