Macy's, Amex launch co-branded credit cards
NEW YORK (Reuters) - Macy's Inc (M.N) said on Wednesday it will brand its credit cards with American Express, ending the retailer's branding deal with Visa.
The department store chain, which also repurchased $500 million in debt, said existing Macy's and Bloomingdale's Visa cards will be replaced by Macy's and Bloomingdale's American Express cards. The credit cards will be issued by Citigroup (C.N).
The new cards will continue to support the Macy's Star Rewards and Bloomingdale's Insider loyalty programs, Tom Cole, Macy's chief administrative officer, said in a statement.
Branded cards are a crucial tool for department stores to track customer habits, personalize marketing and woo shoppers through rewards programs.
They can also account for between 40 percent and 50 percent of a retailer's sales. For example, just over 40 percent of sales at Macy's upscale rival Saks Inc SKS.N are made on its private label credit cards.
The new Macy's cards, which will be sent to customers by the end of 2010, will have the same credit limits, current balances, historical account information and loyalty program rewards as the existing cards.
Separately, Macy's expects the debt repurchases, which were made in the open market for about $526 million, to reduce net interest expense in fiscal 2011 by about $15 million.