For starters, Walmart possesses the infrastructure, customer base and means to radically shake-up the credit card industry. In a recent story by Business Week, Walmart is considering a move to target its customers with sharply lower interest rates and fees compared to traditional credit card companies such as Capital One, Chase, Bank of America, Discover and American Express. While Walmart’s current response to the rumor is one of “no immediate plans”, there is information to suggest that Walmart has discussed a credit card program with Golden West Financial Group. Additionally, in the past two years, Walmart has filed for a bank charter in Canada and Mexico.

With credit card companies tightening credit standards, Walmart would have a major opportunity to attract potential card holders that might find it difficult getting a new credit card or have received recent changes to their existing credit card account. This includes reduced lines of credit as well as higher interest rates. As the epitome of low price retailer, Walmart claims that the fees it charges for financial products are typically 50% less than the competition.

Walmart has reported a 7.5 percent decline in credit card usage at their stores in 2008. Experts attribute this activity to consumers having no available credit left on their credit cards. The key to executing a successful strategy in profiting from a credit card product isn’t dependent on clever marketing tactics but rather having the right risk assessment formula.

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