A private label credit card is a branded credit card designed exclusively for use at a brand, store, or retailer. These cards combine branding, customer loyalty initiatives, and targeted financing options, and offer insights into how businesses can use finance and branding to create distinctive new areas of value for their customers.

Below, we’ll cover what private label credit cards are, how they work, their benefits and potential challenges, and what businesses should know before introducing their own card.

What’s in this article?

• What are private label credit cards?
  
• Private label credit cards vs. co-branded credit cards
  
• How do private label credit cards work?
  
• Benefits of private label credit cards for businesses
  
• Downsides of private label credit cards for businesses
  
• How to get a private label credit card for your business
  
• How Stripe Issuing can help
  

What are private label credit cards?

Private label credit cards (often called white label credit cards) can typically only be used at one specific retailer or family of brands. They are issued by a retailer or brand in collaboration with a financial institution and carry the issuing retailer’s branding.

These cards allow businesses to cultivate customer loyalty and gather detailed data about customer purchasing habits. In exchange, businesses will typically entice shoppers with rewards programs, store-specific financing plans, or discounts at checkout. An example is a Kohl’s Card, which can only be used at Kohl’s retail stores or website.

In 2025, the private label credit card market was estimated to support $176.4 billion in payment value.

Private label credit cards vs. co-branded credit cards

Private label credit cards, also known as closed-loop cards or store-branded credit cards, are issued by a retailer and can typically be used only at that retailer’s locations or website. Examples include the Target Circle Card, My Best Buy Credit Card, and Macy’s Credit Card. Often, they are not associated with a major card network (such as Visa or Mastercard) and are designed to build loyalty with that store or brand.

Co-branded credit cards, such as the Amazon Prime Visa or Costco Anywhere Visa, are the result of a partnership between a retailer (or other type of business) and a financial institution or card network. These open-loop cards can be used anywhere the card network is accepted, not just at the co-branding retailer. They offer special benefits or rewards when used at the associated retailer but function like a regular credit card elsewhere.

How do private label credit cards work?

Private label credit cards are dedicated financial tools tied to specific retailers or brands. Here’s a look at how they work:

• How retailers issue private label credit cards: Retailers collaborate with financial institutions to develop and introduce these cards. The card’s design and branding usually reflect the retailer’s identity, making it distinct from general-purpose cards.

• How customers can use private label credit cards: Private label credit cards have a limited acceptance range. Typically, a cardholder can use a private label credit card only at the designated retailer’s outlets or online platform.

• How retailers can incentivize private label card usage: To strengthen customer loyalty, retailers offer private label credit cardholders incentives such as exclusive discounts and points-based rewards, early access to sales, and special promotional periods with zero or reduced interest.

• How retailers use cardholder data: One of the primary advantages for retailers is the ability to collect granular data about cardholders’ purchasing habits. This data can influence marketing strategies, inventory decisions, and promotions, offering retailers a competitive edge.

• How customer credit is assessed: Typically, the partner financial institution manages the application process and is in charge of determining creditworthiness, setting credit limits, and approving or denying applications based on the applicant’s financial profile.

• How private label billing and interest work: Private label credit cards function in a similar way to traditional credit cards regarding monthly statements, displaying transactions, outstanding balances, and any interest charges. Sometimes, private label credit cards come with higher interest rates compared with those of general-purpose cards, so it’s key for customers to understand terms before committing.

• How retailers and financial institutions manage risk: Though the financial institution handles most credit risks, the specifics of risk-sharing are outlined in the partnership agreement between the retailer and the institution. This partnership dictates who absorbs losses from defaults or delinquencies.

• How customers get support for private label credit cards: Though the card might bear the retailer’s branding, the partnering financial institution manages most backend operations, including customer queries, payment processing, and dispute resolutions.

Retailers use private label credit cards to build a stronger, more direct relationship with their customers by offering them exclusive advantages. Retailers also benefit from the wealth of in-depth data and insights these cards provide.

Benefits of private label credit cards for businesses

As unique financial tools customized to specific retailers or brands, private label credit cards have the potential to generate a variety of advantages that can bolster a business’s growth and customer engagement, including:

• Customer loyalty: Creating a dedicated payment channel often results in stronger customer relationships. Private label credit cards offer a swift, integrated payment process and, often, exclusive incentives and promotions. This can lead to greater engagement, prompting customers to prioritize the brand over others.

• Data collection: With each transaction customers make with a private label credit card, retailers gain important insights from card data. This data can guide decisions about inventory, marketing strategies, and targeted promotions, empowering businesses to make more informed choices.

• Increased sales: The purchasing power a credit line offers can motivate customers to spend more, potentially leading to higher average transaction values and more frequent store visits. Businesses can boost this by offering specific financing options, such as deferred interest plans or unique installment agreements.

• Brand differentiation: Issuing a bespoke credit card elevates a brand’s status and reinforces brand recognition by serving as a continuous reminder of the brand every time the customer uses the card.

• Partnership support: Collaborating with financial institutions can yield joint marketing ventures or access to resources that might be out of reach for a retailer operating alone.

With these benefits, businesses can harness the power of private label credit cards to shape their growth trajectory. These cards are often underrated in the broader credit market, but they can be powerful tools when retailers integrate them correctly.

Downsides of private label credit cards for businesses

Private label credit cards provide a range of advantages—and challenges. These cards can create deeper customer engagement and potential revenue streams, but the operational, financial, and reputational risks need careful management. Here are some of the possible drawbacks:

• Limited appeal due to restricted use: Private label credit cards are restricted to the issuing retailer or brand, limiting their use for customers and potentially reducing their appeal compared with more universal credit cards.

• Exposure to credit risk and defaults: Even if a retailer is partnered with a financial institution, the business might bear some credit risk, especially if there’s a high rate of default among cardholders.

• Complexity of managing a credit card program: Introducing and managing a credit card program can strain a business’s resources, demanding dedicated teams to oversee the partnership, manage promotions, and address issues.

• Potential customer pushback over high rates: These cards often carry higher interest rates than general-purpose cards, which can deter financially savvy customers and potentially leave customers with a negative perception of the brand.

• Possibility of encouraging customer debt: Encouraging customers to use these cards might inadvertently lead some into debt, which can have long-term negative consequences for customers in addition to affecting their long-term loyalty and trust in the brand.

• Potential risk to damage business reputation: Any issues with the card—for instance, data breaches or disputes over interest charges—can reflect poorly on the retailer, even if the financial institution is at fault.

Before offering a private label credit card, it’s important to understand what obstacles you might face. Deciding whether to adopt a private label credit card must be an informed and intentional choice that reflects broader business goals.

How to get a private label credit card for your business

Introducing a private label credit card to your business arsenal involves a blend of planning, collaboration, and oversight. Here’s how to approach this initiative:

• Assess your customers’ needs and buying habits: Assess your customer base. What are their buying habits? Would they appreciate the flexibility and benefits of a dedicated credit card?

• Choose a financial partner that aligns with your brand: Research and collaborate with a financial institution that aligns with your brand’s values and objectives. This institution will manage the card’s backend operations, including credit assessment and billing.

• Create a card design that reflects your brand: Work closely with designers to make sure the card reflects your brand identity. The card’s look and feel should align with your brand ethos and appeal to your target audience.

• Define the card benefits offered to your customers: Decide on the unique benefits and incentives your card will offer. This could include special discounts, reward points, or financing options.

• Set clear terms and conditions: Work with legal experts to draft clear terms for card usage, interest rates, and other associated conditions.

• Market the card and related programs to your customers: Develop a comprehensive marketing strategy to promote your card. This could involve in-store promotions, online campaigns, and targeted ads.

• Train your staff on the credit card’s features: Educate your staff members about the card so they can assist and promote it to potential customers.

• Monitor and adapt your credit card program based on data: Once you launch the card, keep a close watch on card adoption rates, usage patterns, and customer feedback. Use these insights to refine benefits and address any issues.

Establishing a private label credit card for your business demands rigorous attention to detail, ongoing oversight, and a strong commitment to the customer experience. When executed with precision, this initiative can fortify your position in the market and create lasting bonds with your customers.

How Stripe Issuing can help

Stripe Issuing allows you to easily create, distribute, and manage custom cards—generating new revenue streams and enhancing your customer experience.

Issuing can help you:

• Launch new card products: Quickly create physical, virtual, or tokenized cards customized to your specific business needs—whether that’s expense cards, rewards, or something else.

• Improve operational efficiency: Automate card issuance and management through Stripe’s APIs, reducing the complexity of working with multiple card issuers.

• Enhance customer experience: Offer your customers a branded card experience that integrates seamlessly with your existing products and services.

• Gain visibility and control: Access detailed transaction data and controls to monitor card usage, set spending limits, and suspend cards when needed.

• Expand revenue opportunities: Monetize your card programs by collecting shared interchange revenue or by offering value-added services.

• Access Stripe’s expertise: Benefit from robust infrastructure and compliance support, influenced by Stripe’s experience powering card programs for leading companies.

Learn more about how Stripe Issuing can help you drive growth with custom card programs, or get started today.