Why do so many stores have their own credit cards? What’s the benefit for the retailer?
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By having a card with excusive discounts or rewards tied to it, the average shopper will spend more with the store. The stores know this. The average shopper will not pay off their credit card balance in whole monthly, so the store will then make boatloads of money off the interest fees, creating an entirely new revenue stream. They also are then able to build a comprehensive profile of you as a customer and potentially target you for peronsalized offers that will get you to spend more.
Basically, imagine if you have signed up for a Kohls credit card, and you want a new pair of shoes. Your options are to go to the mall and spend $100 on new shoes at Macy’s from your checking account, or go to Kohls where you will get 10 percent off and have a credit card already. It greases the skids for you to buy more from Kohls.
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