Essay About Credit Cards And Big Brands

Barclay Cards
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Executive Summary
Barclaycard, a subsidiary of Barclays Bank was launched in USA in 2004.The offerings at
Barclaycard can be broadly classified into Credit Cards and Prepaid Cards. These service lines then
have various offerings catering to different customer needs like Gift Cards Barclays Card Rewards,
Travel and Entertainment, Retail, Special Interest and Business Cards. Barclaycard have a strategy of
co-branding with existing big brands. For example it has tied up with Virgin airlines to come up with
a credit card in the Travel and Entertainment segment. Barclaycard till date has emphasized mainly
on the credit card segment. This can be explained by the fact that in USA it has only two offerings for
the prepaid segment of the business.
Post the 2008 recession, the credit card industry has been affected because of the following reasons:
 Stringent rules and regulations for issuing credit cards to the consumer
 Drop by 25% in the number of credit cards in circulation from 2010 to 2011
 Conservative approach of the consumer to usage of credit cards
 The Credit Card Act (2009) has resulted in laws that have made it difficult for the credit card
and debit card issuers to earn sustainable profits.
Due to these macroeconomic conditions, there is a slowdown in the growth of all credit card
issuers in USA. Barclaycard has been no exception to this slowdown. It needs to regain its growth
rate through a different service offering. This can be achieved by either extending the prepaid card
offerings to prospective customers with different needs or introducing a line of debit cards.
However, the lack of infrastructure in USA in terms of physical presence acts as a major hindrance
for penetrating the debit card market.
Currently, prepaid cards have become popular with the American consumers.
1. Keeps the user debt free as spending is limited to the amount loaded, thereby keeping
spending habits in check.
2. No requirement to open a bank account
3. Convenient option for the “unbanked consumers” in the USA
Given