At a time when most credit card issuers are pulling back, Alliance Data Systems Corp. is trying to navigate the recession by expanding its private-label portfolio, reports American Banker, a CardLine sister publication. The Dallas-based company, the fifth-largest issuer of store cards for retailers, says it can pick up large numbers of highly creditworthy cardholders in this environment, notwithstanding the strains on consumer finances. "We play in a certain sandbox, and that sandbox has about 300 retailers and they tend to be a little bit on the higher end," says Edward Heffernan, Alliance Data CEO. Because it has a relatively small portfolio ($4.3 billion of managed receivables), and "because we only play in one part of the pool, we're not faced with the issue of stopping because we've exhausted that pool," he says. "We can expand for a long, long time." Heffernan said in an investor presentation last month that credit loss rates could "skyrocket" for competitors. But for Alliance Data, "the difference is, the bank card industry is shrinking," he says. "We are growing, not because we changed credit [standards], but because we signed retailers. We're going to skim the cream off the crop with those retailers."

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