Ally Financial Sells Credit Card Business to CardWorks

The Detroit-headquartered Ally Financial and CardWorks, a trusted leader in credit and payments, on Wednesday entered into an agreement for CardWorks, and its wholly-owned bank subsidiary, Merrick Bank, to acquire Ally’s credit card business, including a portfolio of $2.3 billion in credit card receivables with 1.3 million active cardholders as of 31 December 2024.

Ally and CardWorks will work together to ensure a smooth transition for customers and employees. The transaction is expected to close in 2025, subject to the completion of customary closing conditions.

Ally CEO Michael Rhodes said that his company’s decision to sell its credit card business was part of their broader strategy to pursue a more focused approach, enabling them to simplify and streamline their structure, prioritise the core businesses, and drive improved returns.

He also said that they were 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.

As the company embarks on the next chapter at Ally, they will remain relentlessly focused on doing right by our customers, communities, employees and shareholders, he said.

CardWorks CEO Dan Pellemer said that this portfolio and platform acquisition is an exciting step in the expansion of their near-prime credit card business, and a natural fit for the company. As servicing partner to the platform since inception, we have always admired this talented team and are thrilled to add them to the CardWorks and Merrick Bank family, he added.

All-Digital Bank                         

Ally Financial is a financial services company with the nation’s largest all-digital bank and an industry-leading auto financing business, driven by a mission to ‘Do It Right’ and be a relentless ally for customers and communities.

It may be recalled that Ally sold another business – its $2.2 billion point-of-sale financing unit – to Synchrony Financial exactly a year ago. That sale was completed in March 2024.

The sale to Synchrony Financial included relationships with nearly 2,500 merchant locations and more than 450,000 active borrowers in home improvement services and healthcare.