Co-branded retail credit cards are falling out of favor as a financing option for big-ticket purchases. According to a survey from Citizens Bank, up to 66% of shoppers feel that they already have enough credit cards and prefer not to open more just to make a big purchase.
Only 43% of consumers are likely to recommend co-branded credit cards for big-ticket purchases. Instead, most consumers want simpler alternatives to opening a new card: 62% would prefer fixed monthly plans with clear payment terms.
In line with the theme of simplicity, 76% of U.S. consumers are more likely to make a retail purchase if a payment plan is backed by a simple and seamless POS experience, making this the most important factor for consumers making a large purchase.
“The bottom line is that consumers want a simple and easy experience when they make a large purchase, and we believe that this research shows that retail brands can modernize their payment model by moving away from the co-brand/store credit approach of the past,” said Andrew Rostami, EVP and Head of Unsecured Lending and Cards at Citizens Bank in a statement. “We’ve seen this first-hand as the financing partner for well-known technology brands and believe there is tremendous opportunity in this space.”
Categories that were most popular for financing plans included electronics, appliances, specialty retail, home improvement and automotive repair.
The survey included 520 respondents that used a retail payment plan to finance a large purchase in the past 24 months, and 617 respondents that opened a retail credit card to finance a large purchase in the past 24 months.