IKEA and Visa Launching a Credit Card in the US
In the US, IKEA introduces the IKEA Visa Credit Card (with Comenity Capital Bank). This loyalty-driven card allows customers to benefit from discounts on purchases from this brand, as well as day-to-day expenses. The idea is to target a larger number of customers who may choose this means of payment on a daily basis.
In February this year, IKEA launched the IKEA Projekt card for their IKEA US stores only. This solution features a 60 month financing option on purchases worth $5,000 dollars or more (APR: 4.99% over 60 months). It may then be compared to a personal loan for home refurbishment or decoration projects, for instance.
Customers can apply for IKEA’s new Visa Credit Card in-store or online. This loyalty card comes with a revolving credit (21.99% interest rate). It provides cardholders with a means to enjoy different discounts including cash-back (5% on purchases from IKEA US; 3% on other day-to-day purchases, including food and utilities; 1% on all other purchases. The cash-back they earn can be redeemed through discount coupons for use at IKEA US stores only.
With this service, IKEA US tries to increase their daily card use. This program is designed to attract as many customers as possible, in hope that they might opt for this card as their main means of payment.
Comments – A credit card to boost customer loyalty
Many financing solutions are already available in the US. The Swedish brand relies on a new service featuring a cash-back system: similar offers have already been launched in the US by other players (Nissan, PayPal, Amazon). The first card they proposed (projekt card) mostly allowed access to financing options for larger-scale projects, while their new offer is chiefly meant to assert customers’ loyalty. The associated rewards program has been crafted with recurring purchases in mind, hence their private label cash-back system, as is the case in France with the Fnac Mastercard card.
Also, in France IKEA already proposes a revolving credit offer together with the IKEA FAMILY Aurore credit card (Cetelem), for purchases ranging from €60 to €4,500.