A steep reduction in bad debt led to
impressive results during the second quarter in the credit card
business of US retailer Target.
The credit card segment of the company saw
profit jump to $149m compared with $63m during the second quarter
of last year. Sales at the American discount chain store were up
3.8 percent on the same period last year.
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In April this year, Target announced it would
stop issuing its open-loop Visa-branded credit cards in favour of
its own card brand after research showed guests spent more when
using a Target credit card instead of a Target Visa. A spokesman
said the move had no bearing on the first half results, and it
would take time for the impact to impact the retailer’s bottom
line.
“Our credit card segment enjoyed very strong
results, as disciplined underwriting, superb execution and
improving risk trends caused a sharp reduction in bad debt
expense,” said Gregg Steinhafel Chairman, President and Chief
Executive Officer of Target.
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