So you want to start a credit card program...

By: Alex Cramer on 20 March 2017

So, you want to start a credit card program… Great idea!

After all, it can provide a great source of revenue, and a wonderful way to grow your business and promote loyalty.

Unfortunately, it’s not quite that simple (trust us, we know).

Over 50 high-level decisions have to be made at the beginning of a program, from things as small as when to apply late fees to as large as the underwriting criteria for deciding who is eligible to become a cardholder. Having talked through all these decisions many times over, we wanted to share a bit about what we’ve learned so far.

We’ll be covering a few topics in this series of blog posts, but first let’s start with the basics: who is your cardholder?

If you already have a company, you’ll probably want to start by looking at your current user base - where are they located? What age range do they fall into? What is their income level? How do they do their shopping - online or in-stores? Are they big spenders or frugal? Depending on your answers to these questions, you may quickly find that your current customers wouldn’t make up a great credit card portfolio at all. For instance, if your usual audience is young teenagers, you won’t be able to convert them to cardholders, at least not for a few years.

But that’s okay - after all, one of the great things about having an existing brand and then starting a credit card program is that it’s an alternate line of business. You might be able to use it to attract an entirely new demographic, and then convert them onto your existing product, perhaps through a rewards program (something we’ll dive further into later.)

Once you’ve decided on the basics of who you want to attract to your cardholder base, you need to dive a little further into credit-specifics: how are you going to define eligibility for your program. What will your underwriting criteria be? Remember - the core of this business is providing money to people with the expectation they will pay it back. You may not want to underwrite people with a low credit score, or not much credit history at all when you’re first getting started, due to the risk. On the other hand, you may take a look at the competitive scene and decide that these are particularly underserved groups that you’d like to take the risk on. It’s all up to you!

Have questions about “all the things” that go into this process? Want some help deciding if a credit card program is the right next step for your business? Let us know at!