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Wesfarmers sells Coles credit cards to Citi


Coles supermarket

What does the new distribution agreement mean for current and future Coles Credit Card customers?

Today, Wesfarmers announced that Coles has agreed to enter a 10-year agreement with Citi for the distribution of Coles-branded credit cards. While Coles will continue to distribute credit cards under its brand, Citi will issue the card and manage the operations of the credit card portfolio and fund the receivables. This news follows the group's decision to break away from GE Capital last year following a long-term financial partnership.

Considering Coles currently services over one million customers across credit cards plus car and home insurance, how will this impact current and future Coles credit card holders? Coles managing Director John Durkan said the supermarket's partnership with Citi would continue to provide simple and competitively priced products for Australian customers.

While it's difficult to predict exactly how this could impact existing or future customers, there are a few likely changes. For example, if you have an existing Citi credit card and want to conduct a balance transfer, you won't be able to take advantage of one of Coles' 0% balance transfer promotions. This is because you can't transfer balances that are distributed by the same issuer. However, as Citi is the fifth largest bank in Australia (just after the Big Four), Durkan's promises of more competitively priced products could also come to fruition with a stronger issuer backing it.

The transaction is expected to be completed by February 2017, pending Foreign Investment Review Board approval and we won't see how it will affect Coles' earnings until after the 2017 financial year. Until then, keep an eye out on any notifications from Coles, any changes to your credit card product disclosure statement and, of course, any updates from

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