Kmart Entices Shoppers With Credit Card

After a successful test market, Kmart Corp. announced this week that it will join dozens of other retailers by launching its own credit card in an attempt to attract more customers.

The card has no annual fee and features up to a 6 percent rebate, but the interest rate is 13.15 percent plus the current prime rate, which puts the rate at 21.4 percent.

The card was introduced in a test program in 11 markets in March, and Kmart found that cardholders shopped more often and spent more on average than non-cardholders. The results were encouraging enough to convince Chairman Floyd Hall to roll out the program nationally.

“It’s a way of building customer loyalty,” said David Mahler, publisher of Inside Retailing, a trade publication based in New York. “If I can get a 6 percent rebate for shopping their store, I may shop there more often than other stores.”