Ally Financial will sell its credit card business to CardWorks and its bank subsidiary, Merrick Bank, for an undisclosed sum, the lenders announced Wednesday.
Ally said this month that it was exploring “strategic alternatives” for its credit card business, after CEO Michael Rhodes indicated in December that it wasn’t part of its core focus.
“Ally’s decision to sell its credit card business is part of our broader strategy to pursue a more focused approach, enabling us to simplify and streamline our structure, prioritize our core businesses, and drive improved returns,” Rhodes said in a prepared statement Wednesday. “We are proud of the results the business generated over the last three years and pleased with the terms of the agreement and the opportunity for this business to continue growing with CardWorks.”
The business had a portfolio of $2.3 billion in credit card receivables with 1.3 million active cardholders as of Dec. 31, Ally said.
CardWorks CEO Dan Pillemer called Ally’s credit card business “a natural fit” and “an exciting step in the expansion of our near-prime credit card business.”
The transaction is expected to close this year, the institutions said.
Almost exactly one year ago, Ally sold another business – its $2.2 billion point-of-sale financing unit – to Synchrony Financial. That sale was completed in March 2024.
A spokesperson for Ally redirected Banking Dive to Wednesday’s press release.
A spokesperson for CardWorks declined to comment further, but said they would likely have more to say once the transaction closes.
