Credit Cards Are Becoming a Prime Target for Private Credit

Private credit groups purchased or entered into agreements to purchase $136 billion in consumer loans in 2025, according to a new report from the Financial Times. Deals involving private credit groups buying consumer loans in 2025 far outpaces their purchases of similar debt in 2024, during which they only acquired $10 billion worth.

For credit card issuers, the acceleration of consumer loan purchases by private credit groups signals that the returns credit card portfolios can provide are becoming increasingly attractive to non-bank entities.

And data from the Board of Governors of the Federal Reserve System reveals that domestically chartered commercial banks have taken a noticeable step back when it comes to their holdings of credit card debt and other revolving plans in 2025.

But the actions of private credit groups are helping companies that contend with credit card issuers for payments market share. Leading buy now, pay later outfit Affirm has been able to set its plan for growth by selling billions of dollars of both current and future loans to insurers and investment firms, according to the Financial Times.

“These deals underscore an emerging trend where private capital is fueling rapid growth in unsecured consumer lending, while regulated incumbents continue to move with caution,” KBW analysts said in the report.

The increasing appetite of private credit groups to get involved with consumer loans may create more competition for traditional credit card companies on the co-branded card front.

Co-branded credit card programs can be mutually beneficial to brands and traditional card issuers. But brands that are looking to establish a new co-branded credit card product in 2026 may elect to partner with private credit platforms to bring their program to market.

Sanji Gunawardena founded Fidem Financial in 2018, and the company has purchased $15 billion in credit card receivables since then, according to the Financial Times. Gunawardena has rolled out a new initiative to help consumer companies launch co-branded credit card programs.

Regulations that banks — but not private credit groups — must adhere to may be discouraging issuers from engaging in new activity in the co-branded card sphere.

“Post-crisis rules have pushed many banks to pull back from co-brand partnerships and focus on their own cards, leaving brands with few strong options to launch or scale programs,” Gunawardena told the Financial Times. “We see a clear gap where private capital can step in.”