The deal includes a credit card portfolio valued at USD 2.3 billion in receivables and 1.3 million active cardholders as of December 31, 2024.
The sale of Ally’s credit card business is part of a broader strategy to simplify and streamline operations. By focusing on core business areas, Ally aims to improve financial performance and increase returns. This move reflects the company’s ongoing efforts to improve efficiency while maintaining a strong commitment to its customers and shareholders.
CardWorks sees this acquisition as a key opportunity to grow its near-prime credit card business. Having served as the servicing partner for the platform since its inception, CardWorks views this acquisition as a natural fit. The company plans to integrate Ally’s credit card portfolio to strengthen its market position and continue providing customised financial solutions.
Both companies are working together to ensure a smooth transition for customers and employees. The deal is expected to close in 2025, subject to customary regulatory approvals and closing conditions.
J.P. Morgan Securities LLC and Sullivan & Cromwell LLP acted as financial and legal advisors to Ally Financial. CardWorks was advised by Cravath, Swaine & Moore LLP.
The credit card industry has seen significant shifts in recent years, driven by evolving consumer behavior and technological advancements. One notable trend is the rise of near-prime and subprime credit card offerings, catering to consumers with less-than-perfect credit who are seeking accessible credit options. This has been accompanied by a broader shift toward digital and mobile payments, as more consumers opt for contactless and app-based transactions for convenience and security. Younger consumers, in particular, are leading the charge in prioritising digital-first experiences, expecting instant access to financial products through mobile apps and online platforms. This shift has placed increased pressure on financial institutions to innovate and adapt their offerings, ensuring they meet the demands of a tech-savvy, convenience-driven generation that values flexibility and ease of use in their financial services.
This transaction highlights the shifting dynamics within the financial services industry. As firms streamline operations and form strategic partnerships, such deals play a crucial role in optimising growth opportunities and improving service offerings. By aligning their strengths, Ally and CardWorks are poised to benefit from better market presence and increased customer loyalty.
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