Synchrony Is Enjoying Strong Loan Growth, but Credit Card Charge-Offs Will Continue To Rise

Synchrony Financial partners with retailers and medical providers to offer promotional financing as well as private-label and co-branded general-purpose credit cards. While the company’s CareCredit cards and installment loans have consistently performed well, its private-label and co-branded credit cards, co-marketed through partnerships with retailers, can often face material headwinds when retail sales suffer. These headwinds can be particularly intense if the retailers that Synchrony partners with fail during a recessionary period, which adds to the already meaningful macroeconomic exposure of credit card issuers in general.