Target postpones plan to sell off debtby Martin Moylan, Minnesota Public Radio
St. Paul, Minn. — Target is putting on hold an effort to sell a $6 billion portfolio of credit card debt.
A year ago, Target said it planned to sell the credit IOUs and use the cash to buy back more of its stock and pay down its own debt.
"We're temporarily suspending those efforts and expect to reengage later in 2012 in order to complete a deal in late 2012 or early 2013," said Eric Hausman, spokesman for Target. "Based on our discussions we've determined it's just not in our best interests to finalize a transaction at this time."
In 2008, Target sold almost half its credit card loans to J.P. Morgan for $3.6 billion.
Hausman did not elaborate, but profits in the retailer's credit card unit have been rising. Fewer customers are behind on payments. And more shoppers are using Target credit cards. The cards deliver a 5 percent discount on purchases made at Target. Target credit cards now account for about 7 percent of the retailer's sales.