Starbucks launches new credit card for coffee lovers

Starbucks is offering a new product which it hopes will bring more coffee lovers to its stores.

The card, launched yesterday with JPMorgan Chase and Visa, comes as Starbucks struggles with falling growth in the US. With the new card, Starbucks wants to attract customers who have not yet signed up for its rewards programme. The Seattle-based company has over 14 million Starbucks members in its rewards programme in the US, but it is working to increase the number as members tend to stop by its shops more often for coffee or snacks.

For the Starbucks Rewards credit card, customers pay a $49 annual fee. Also Cardholders earn free Starbucks  drinks and food with purchases they make at the coffee chain and elsewhere. Cardholders will be enrolled into the Starbucks rewards programme.

According to commentators, branded credit cards like Starbucks' have been popular for decades since they help strengthen customer loyalty. Ride-hailing company Uber, too launched a credit card last year.

Starbucks added it also has plans to launch a prepaid card in April with Chase for those who do not require a credit card or cannot qualify for one.

People who sign up for the card will get a physical piece of plastic within 7-10 days of getting approved for the card and will also get a digital version of the card immediately loaded into the Starbucks mobile app.

But Starbucks added that along with JP Morgan Chase, it is also working on a co-branded prepaid debit card that will launch later this year. This could attract consumers who have poor credit histories or are wary of adding on more debt.

CEO Kevin Johnson, who took the reins from Howard Schultz last year, told analysts during a conference call that demand for the company's limited-time holiday beverages, gift cards and other merchandise "did not resonate with our customers as planned."