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By Jenny Surane
Citigroup Inc. plans to debut a new credit card with multiple retailers that consumers will be able use for larger purchases.
The new card, known as Citi Pay Credit, comes from the lender’s retail-services unit and will be digital only, according to a statement Wednesday. Citigroup is lining up retail partners for the card and plans to add an installment-loan product for merchants in the program as well.
“It puts customers in control of how they want to finance purchases,” Kartik Mani, chief executive officer of the bank’s retail-services division, said in an interview. “We are very excited about this next phase of the journey.”
Citigroup’s retail-services unit offers private-label and cobrand credit cards for retailers such as Macy’s Inc. and Wayfair Inc. Typically, private-label cards work at just one merchant and offer special perks tied to spending at its stores.
The new card, though, will be separate from those existing products and work across any retailer that signs up to offer it. It will allow merchants to offer promotional financing to their customers, and the card’s independent line of credit should help users make large or unexpected purchases, NEw York-based Citigroup said.
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The new product is based on the idea that consumers might want to finance a purchase and receive promotional interest rates without signing up for a credit card that’s dedicated to one specific retailer. In some ways, it’s similar to Synchrony Financial’s CareCredit product, which is accepted at more than 250,000 health-focused service providers and retail locations.
Citigroup’s installment-loan product, which the bank plans to debut in the coming months, will allow customers to make a purchase and pay it off in equal monthly amounts over as long as five years.
The lender’s move comes as US consumers have increasingly flocked to new forms of point-of-sale financing, especially for larger purchases. One 2022 study from credit-reporting company TransUnion found that as many as 100 million Americans had used such financing.
