Ally Financial Sells $2.3B Credit Card Business to CardWorks and Merrick Bank

Ally Financial announced the sale of its $2.3 billion credit card business, which serves approximately 1.3 million cardholders, to CardWorks and its subsidiary Merrick Bank. The transaction allows Ally to streamline its operations and focus on its core auto lending and digital banking businesses. CardWorks and Merrick Bank gain a substantial card portfolio that bolsters their position in the consumer lending space.

Merrick Bank, which has historically served as a partner bank for various fintech and card programs, stands to benefit from the increased scale. Financial terms beyond the portfolio size were not fully disclosed. The deal is part of a broader trend of banks reshuffling their business lines to optimize for strategic fit, while specialty lenders and partner banks absorb divested portfolios.

This transaction underscores the growing role of banks like Merrick in acquiring card assets that can support embedded finance and BaaS-adjacent card programs.