As one major credit card issuer raises cash by selling off operations, another prepares to streamline its offerings to save money. A report in the Wall Street Journal chronicled the efforts of Citigroup CEO Vikram Pandit to liquidate some Citi Credit Card private label and affinity products. Citi's Sears Holdings card accounts and other affinity products are on the auction block to help the company replenish its cash reserves.
Meanwhile, officials from Chase Credit Cards announced the end of some niche affinity cards, including the Starbucks Duetto Card. Bank officials told reporters that the Starbucks card and other affinity products failed to generate significant revenue for the company, while costing more to operate than Chase's own credit card products.
In years past, an affinity credit card dropped by one lender would often be picked up by another, especially airline cards and products sponsored by colleges or professional associations. However, new credit card regulations make it difficult for lenders to sell credit card portfolios as active accounts. Experts predict that the accounts sold by Chase and Citi may end up as unsecured loans, leaving cardholders with no ability to make new purchases.