Bread debuts American Express card to augment private-label issuance

Less than a month after changing its name to Bread Financial from Alliance Data, the longtime private-label card issuer is rolling out its first cobranded American Express rewards credit card.

The Bread Cashback American Express Credit Card is issued by Bread’s Comenity Capital Bank and offers 2% back on all purchases, Bread said Wednesday. The new card enters the intensely competitive market for mainstream consumers looking to earn cash-back rewards for everyday spending on cards that carry no annual fee.

This isn't Bread's first general-purpose credit card. The Columbus, Ohio-based issuer in 2020 introduced the Comenity Mastercard, to provide shoppers continuity for retail card programs tied to clients that shut down during the pandemic, such as Pier 1 Imports. The Comenity Mastercard offers 1.5% cash back on all purchases.

Victoria's Secret, another one of Bread's longtime retail card partners, recently renewed its agreement with Bread for private-label credit cards, and last month launched the first cobranded Victoria's Secret Mastercard.

By adding another card network partner, Bread further expands the range of credit options it may cross-market to millions of consumers in its database from its decades of offering private-label credit cards to mostly shopping mall-based retailers.

Bread also has a significant role in installment loans after purchasing its namesake buy now/pay later startup in 2020 for $450 million, enabling it to offer installment loan options in conjunction with merchants at the point of sale.

Payments

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For American Express, the new issuing relationship with Bread enables the card network to increase its billable spending through another channel, which has long been one of its corporate goals, according to Brian Riley, director of Mercator Advisory Group's credit advisory services.

“For almost 20 years Amex has been working to expand distribution through bank-issuing partners, since its lawsuit against the largest banks. Despite a strong start, few from the original pack of bank issuers have maintained a long-term relationship with American Express,” Riley said.

Current examples include three Wells Fargo Propel American Express cards, four U.S. Bank FlexPerks American Express cards and cobranded Amex cards issued by Navy Federal Credit Union and USAA Savings Bank.

Last week American Express announced a partnership with the digital card-issuing platform i2c that aims to enable fintechs to issue credit and debit cards with certain perks.