T-Mobile $TMUS (+0,36Â %)
$DTE (+0,75Â %) launches its first credit card in partnership with Capital One $COF (+0,79Â %) launches its first credit card on the market.
The wireless carrier's new card is fee-free and offers 2% T-Mobile rewards, company representatives confirmed to Bloomberg News.
"It's not often you get the opportunity to develop a credit card from scratch," said Scott Simpson, senior vice president of card partnerships at Capital One in the US.
According to the report, the new card will work on the Visa network. T-Mobile customers will receive a $5 monthly discount on their bills when they use the card via direct debit. T-Mobile customers can apply for the new card starting Tuesday (November 4).
André Almeida, President of Growth and New Business at T-Mobile, explained in an interview that the provider had previously considered a credit card, but had not yet found the right partner.
"It's about simplifying the collection of rewards so you don't need a complicated Excel spreadsheet anymore," he told Bloomberg.
Bloomberg noted that this will be Capital One's first co-branded card since acquiring Discover for $35 billion earlier this year. The company had previously forged card partnerships with retailers such as Kohl's, Bass Pro Shops and Williams-Sonoma.
During an earnings conference call last month, CEO Richard Fairbank said that the Discover acquisition was a key contributor to the success of the domestic card business that quarter.
"Factoring in the impact of Discover, the combined domestic card business delivered another quarter of revenue growth, strong margins and improved credit quality," he said.
In other credit news, PYMNTS reported last month on a new study from PYMNTS Intelligence showing that many households, including those with high incomes, have doubts about their credit scores despite good financial circumstances.
"Many Americans believe they have little or no chance of being approved for a new credit product, even though actual approval rates show otherwise," the report states.
This uncertainty also affects people with high incomes: 33% of consumers with an annual income of more than 100,000 US dollars said that they were very likely or certain to have their new credit card application rejected.
However, rejection rates are actually moderate. Of respondents without an active credit card, only 15% said they had ever received a rejection of their desired credit limit. Although high earners often have a high credit rating and sufficient liquidity, they remain cautious when applying for new credit lines and often confuse economic uncertainty with personal risk.