Ally Financial in Detroit is getting back into credit cards with an agreement to buy Fair Square Financial in Wilmington, Del.
The $79 billion-asset Ally said in a press release Thursday that it will pay $750 million in cash for Fair Square. The deal is expected to close in the first quarter.
Ally said the deal provides it with “a scalable, digital-first credit card platform.”
Fair Square, founded in 2016, has focused on providing products that rely on proprietary, analytics-based underwriting. The company has 658,000 cardholders and $763 million in loan balances.
Fair Square uses web and mobile platforms, along with fully digital application process.
Ally ended a three-year credit card relationship with TD Bank in 2019 after deciding that the $100 million portfolio was falling short of expectations.
Ally had a deal in place to buy subprime credit-card lender CardWorks for $2.7 billion put the companies terminated the transaction during the early days of the coronavirus pandemic.
Citi, Goldman Sachs and Sullivan & Cromwell advised Ally. J.P. Morgan and Skadden, Arps, Slate, Meagher & Flom advised Fair Square.