| November 17, 2010

Target attracting more consumers with store credit card

Retailers looking to ramp up holiday shopping this season have turned to store-brand credit cards, which offer consumers increased savings and other incentives that may help them during a tough economic period.

Target expects to see same-store sales increase to their highest level in three years, as a result of its REDcard, which offers consumers 5 percent off all purchases.

Experts are suggesting sales at Target could surpass that of its biggest competitor, Walmart, Reuters reports. The discount chain is citing its growing credit card business as the primary reason for the increase in consumer demand.

“The 5 percent reward program is a small part of their overall business, but I still think that it’s a pretty powerful initiative to drive the consumer into the store,” Brian Sozzi, a Wall Street Strategies analyst says.

Customers who use Target’s REDcards typically spend 50 percent more at stores over the course of the year, the news source says.

Target is one of many stores that have turned to the credit cards in order to attract new customers. Toys “R” Us, Qantas, Chase Bank and GameStop all announced similar programs for the holiday shopping season.

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