Retailers, from Jewelers to Discount Stores, See 2x Spike in New Private Label Credit Cards during Holiday Season

CHICAGO, IL--(Marketwired - November 15, 2016) - While it is common knowledge that more consumers open private label credit cards during the holiday season, TransUnion (NYSE: TRU) research has found that the number of new accounts often doubles for certain retailers in the month of December. The new analysis determined that online stores (2.0x greater than non-holidays), discount retailers (2.0x) and jewelry stores (1.8x) experience the biggest seasonal increases in card originations.

Retail card growth is greatest during the year-end holidays, and the number of consumers with such cards has consistently risen in recent years. The number of consumers with retail card credit jumped from 123.7 million in December 2014 to 124.8 million in December 2015. As of Q3 2016, the number of consumers with retail cards grew to 125.3 million and will likely grow substantially during this year's holiday season. Department store cards make up the largest portion of a consumer's retail card wallet, with about one-third of retail card accounts in that merchant category.

TransUnion also projects retail card balances will continue to increase at the end of 2016 and into 2017, and while the delinquency rate will remain low, it will experience an uptick from the year-end 2015 rate.

"A strong economy has propelled consumer spending, and we expect this trend to continue during the 2016 holiday shopping season," said Nidhi Verma, senior director of research and consulting for TransUnion. "Consumers gain more access to retail cards during the holidays, and they benefit from strong value propositions-discounts and deals-that motivate them to use their cards. The primary beneficiaries from a retail standpoint include online retailers, jewelry stores and big box discounters, who often create enticing offers for prospective shoppers. As consumers spend more time online, it is natural for online retail cards to experience increasingly larger volumes of account openings during the holiday shopping season."

Retail Card Lift in Originations during the 2015 Holiday Season (December)

	Retail Card Category		Lift compared to non-holiday season
	Discount Stores		2.03x
	Online		1.97x
	Jewelry		1.77x
	Department Stores		1.56x
	Clothing		1.35x
	Electronic		1.35x
	Furniture		1.20x
	Home Improvement		1.03x

The consumer makeup of the observed lift in new retail card accounts was spread across the entire credit risk spectrum. The largest lifts were seen in the subprime (VantageScore® 3.0 below 600) and near prime (VantageScore® 3.0 between 601 and 660) risk groups.