GameStop Launching a Credit Card
Sometimes it’s not enough to make money off of new game sales, used game sales, hardware sales, game warranties, merchandise and the like. Sometimes, you have to think outside the game box. That’s what GameStop is trying by becoming the latest store to get into the credit card game.
A Destructoid report based on internal GameStop marketing materials indicate that the new credit cards will be rolled out fairly soon. Who it’s being co-branded with wasn’t disclosed but it won’t have an annual fee and has a 26.99% interest rate.
In order to incentivize GameStop customers to get a GameStop credit card, PowerUp rewards program members will get bonus points for signing up. PowerUp Basic members get 5,000 points while PowerUp Pro members can earn 15,000 bonus points. Credit card holders will also get access to exclusive offers. The card will not, however, make you a member of the PowerUp program or allow you to be a PowerUp Pro member for free. That’ll still be $15 annually.
Getting into co-branded credit cards makes sense for GameStop. A quick look at Visa and MasterCard’s websites indicate that the card companies provide marketing analytics through tracking credit card usage. One would assume that there’s some sort of kickback going back to GameStop like a percentage of transactions or interest. By partnering with a financial institution to issue the card, they also don’t assume the big risk of effectively being a lender. There has to be some risk there but not as much as if it was a purely private label credit card.
So GameStop hasn’t gone insane by offering a credit card. It’s a way to hone their marketing through customer analytics while being able to increase sales to card users through special incentives. That’s not to mention that both Visa and MasterCard report higher spending from co-branded card holders. This isn’t a bad way to make a buck if the risk is low enough.