Strategy: The U.K. Credit Card Industry In The Late 1980's
1. Why had the UK credit card industry been so profitable in the 1980s? Which factors were the greatest threats to continued profitability?
At the beginning of the credit card history in the UK there was only one player, Barclays Bank, which started operating the card business in 1966. It didn't seem a profitable business at the beginning but the major banks were concerned that due to the use of the credit card, the logo of Barclay was appearing everywhere. The main sources of income in the credit card business were the interest paid on debt by the cardholders and the MSC income from the merchants. It also provided a free publicity for the Banks, creating awareness of its presence in different businesses and stores.
The advantages for the usage of the credit card are numerous. For the cardholders it was a source of flexible credit, and for the full payers it represented a credit of 55 days free of interest. It also made easier purchase through cashless transactions (promoting......
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Approximate Word Count: 1070
Approximate Pages: 5 (250 words per double-spaced page)
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