The Search Engine Giant Google has recently introduced a new credit card to select U.S. advertising customers. Following the traditional release pattern for Google products the Google credit card is currently in a beta test phase and is invitation only. Invitations to participate in the new AdWords credit card experience were sent out to a handful of businesses Wednesday July 20, 2011. Unselected users who are interested in obtaining the new credit card will need to wait until the conclusion of the beta test, similar to the launch of Google+ and Gmail.
Although the Google advertising credit card is a MasterCard that that is issued through the World Financial Capital Bank it can only be used to purchase search advertising from Google. The new card is designed to help businesses relieve some of the financial burden of advertising costs. When unable to purchase advertising a business can lose their connection to their customers and often experience a drop in traffic or sales. Without that outlet to reach their customers and showcase their products they miss out on that opportunity to generate revenue. Consequently, without this revenue the business lacks the resources to purchase additional advertising and propel future growth, which is where the new credit card could make a drastic difference.
Google credit card is able to lend some support and prevent a business that is short on funds from missing out on potential sales during the heavy upcoming sales seasons. With this credit card Google advertising customers are provided a line of credit with a locked in 8.99% interest rate with no annual fees. Google expressed that they realize that AdWords provides tremendous growth opportunities for small to medium sized businesses and the goal for the new card is to provide those businesses with a more supportive and attractive way to pay. The number of customers chosen to participate in the beta period is unknown and like most credit cards the minimum and maximum credit lines will vary per customers.
Although the card was created with the customer’s best interest in mind, Google also has an opportunity to capitalize on revenue from the credit card interest payments. Google makes 96% of its revenue from advertising and by offering a credit card they are not only offering their customers extra support but they can also collect extra income.
Brent Callinicos, Google’s Treasurer states “Obviously we have a robust balance sheet, so this is a way for us to use that balance sheet to help our customers, It isn’t a financial engineering project that we came up with and said this would be cool to do. It’s a customer need”.
Missing from the credit card is any type of rewards or bonus points. The company feels that given a choice their customers would rather utilize a card with a 9% interest rate over one that has an 18% interest rate and offers some sort of reward feature.
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