The big business of credit card marketing

Still wondering why there’s such a focus on the co-branded credit card aspect of loyalty programs? Perhaps the news that Credit Karma – one of the largest online financial services advice sites – just received a fresh round of funding which values the company at more than one BILLION dollars is part of the reasoning. But Credit Karma is not a credit card company and doesn’t have a loyalty program, you say? Here’s a key explanation from the WSJ article about the investment:

Instead of charging consumers for these services, Credit Karma makes money through partner sponsorships with financial institutions. Financial institutions pay Credit Karma only when its members actually buy one of their products.

In the same story the company’s CEO suggests that it does the best job of matching customers to credit products. Playing matchmaker can be very, very profitable it turns out.

Perhaps most interesting to me, however, is that the investors seem to think that the gravy train on this front isn’t pulling in to the station quite yet. That, or they believe that Credit Karma has the best system for matching customers to banks and a good means to make those conversions happen such that they’ll keep the business even as others may lose it. They’re certainly big enough, with 32mm customers, to support a decent referral rate for quite a while yet.

Either way, with the co-branded “super-prime” CCs generally the more lucrative ones to the affiliate, this sort of number shows the huge value potential out there for everyone in the loyalty credit card space. Even the consumer every now and then.


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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.


  1. That article explains referral links well. If CreditKarma is worth a billion dollars for its ability to get people to sign up for credit cards, I wonder what the market cap of One Mile at a Time or Mommy points would be.

  2. “loyalty credit card space” — Just funny that they used the word loyalty. I wonder how many folks in the miles/points hobby keep a credit card only for 1 year. I’ll admit if churning is not made possible, I actually would think people would be more loyal to certain credit card products.

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