Consumers Moving from Private Label Credit Cards to Point-of-Sale Loans

Consumers Moving from Private Label Credit Cards to Point-of-Sale Loans

May 16, 2019         Written By John H. Oldshue

Consumers are beginning to change the way they finance large in-store purchases. According to the Q1 2019 TransUnion Insights Report, shoppers are starting to shift to point-of-sale loans in place of private label credit cards.

A private label credit card is store-specific. It offers a revolving line of credit, but only for a particular store. The cards typically come with a rewards program or no-interest financing for a certain length of time, but they cannot be used at other retailers.

Point-of-sale loans are an alternative source of financing. Consumers can get a loan for their purchase, along with a defined set of monthly payments. This credit line is not revolving. It is a finite option for a specific transaction.

For the ninth quarter in a row, private label credit cards have experienced a decline in growth. There were over 126 million private label cards in circulation in the first quarter of 2017. That dropped to 122 million in 2018 and 120 million in 2019.

TransUnion attributes the decline to the increased opportunity for point-of-sale loans, as well as peaked interest in rewards credit cards.

“Consumers are increasingly opting to cash in on their preferred credit card reward program rather than apply for a new private label card,” said Paul Siegfried, credit card business leader at TransUnion.

The shift doesn’t stop with physical retailers. Last year, a Splitit survey found 35% of consumers are more likely to make a large online purchase if they have the option of 0% financing. A study from Klarna found 75% of consumers preferred to shop with stores that offered instant financing. Buyers want to finance large purchases. But a greater number of consumers don’t want a credit card to do be that source of financing.

The information contained within this article was accurate as of May 16, 2019. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and may be compensated if you take action with any of our affiliate partners.


About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
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