Shoppers at The Warehouse will be able to use a new credit card rewards programme to buy items in-store.
Photo/Warren Buckland.
Shoppers at The Warehouse will be able to use a new credit card rewards programme to buy items in-store.
Photo/Warren Buckland.
The Warehouse is to rebrand and extend its financial services offering with the launch of two low cost credit cards.
The discount retailer has previously offered financial products but Warehouse Money will have a separate website and its products will be sold online, via post and over the phone with information available in store.
The Warehouse signalled a stronger move into financial services in March last year after it bought the Diners Club New Zealand business for $3million.
As well as the new money brand it has launched Warehouse Mobile today - a new prepay mobile offer available from November 23 which aims to provide "the simplest and most flexible" prepaid product in the market.
While Warehouse Money will offer two new visa credit cards - a Warehouse Money Visa card offering a five per cent discount in Warehouse stores and online and a rewards card called the Purple Credit Visa card.
The Purple credit card will earn spenders two purple dollars for every $150 spent at The Warehouse and one purple dollar for every $150 spend elsewhere.
The rewards can only be redeemed in store at The Warehouse, although a number products are excluded from being bought with the rewards.
Both cards will have no establishment or annual fees but the catch comes in the form of a late payment fee of $15.
The interest rate for both cards is 19.95 per cent on purchases.
Our focus is not so much to grow the debt or credit market in New Zealand, but to provide everyday customers and credit card users more choice and products that are better-suited to their needs.
Raewyn Fox, chief executive of the Federation of Family Budgeting services questioned the need for another credit card offering in the New Zealand market.
"It's just another consumer inducement to buy. You've got to ask do we really need more?"
Many of the people who used its budgeting services were there because of problems paying for multiple credit cards, she said.
While the lack of admin fees could allow people to access more cheap products it would be costly for anyone who slipped up and didn't make their payment on time.
"If someone has a woopsy it could cost them a lot of money."
Late payment credit card fees are already facing scrutiny with a legal case against the four major Australian-owned banks ANZ, BNZ, Westpac and ASB and state-owned KiwiBank pending in the courts.
Fox said there were questions over whether the fee was a genuine cost.
"As long as people can make repayments they will be fine."
She said The Warehouse, like all lenders, had a responsibility to ensure people could make their payments.
Mark Yeoman, chief executive officer at The Warehouse Group Financial Services, said all Warehouse Money products aligned with New Zealand's Responsible Lending Code and the company took its commitment to being a responsible lender very seriously.
"Our focus is not so much to grow the debt or credit market in New Zealand, but to provide everyday customers and credit card users more choice and products that are better-suited to their needs," he said.
Yeoman expected the no admin fees feature to be attractive.
"Customers don't like fees, and they especially don't like it when fees turn up as surprises because they weren't planning for them.
"That's why we are introducing cards with no annual fees or administration-type fees." he said.
"We think that our everyday customers will like that, and recognise that every little bit helps when it comes to thinking about your money".
Warehouse Money will also offer travel, health, car, home and contents insurance through a range of providers.
Yeoman said the new brand was designed to represent smart and simple financial solutions to help Kiwis make more out of their everyday.
In 2014 Warehouse chief executive Mark Powell said its financial services business had a book value of about $400 million but it saw that growing to $600 million.
At the time he expected development of the business could add between $25 million and $30 million to the company's bottom line in the medium to long term.
• The Warehouse also announced its first quarter results today with sales up 7.7 per cent and improved margins at its discount chain ahead of the key Christmas trading period.
Group sales rose to $634.5 million in the quarter ending November 1, from $589.4 million in the year-earlier quarter, when sales increased 3.5 percent.
Warehouse, which posted a 5.9 percent drop in profit last year, is seeking to generate earnings growth following a $100 million 'refresh' programme for its Warehouse discount stores, the acquisition of Noel Leeming and Torpedo 7, and its move into online sales.
