Product details

NextCard was a credit card issuer seeking to exploit the growing e-commerce market in the United States. It was founded in 1996, saw a successful initial public offering in 1999, and became an affiliate of Amazon.com, the largest on-line retailer. The year 2000 was a year of growth for NextCard, with the number of accounts more than trebling, to nearly three quarters of a million. However, on 31 October 2001, NextCard was placed under ''new regulatory limitations'' that imposed higher capital requirements than NextCard could meet. Goldman Sachs attempted to find a buyer for NextCard, but was not successful. On 10 July 2002, NextCard accounts were closed. This case can be used to discuss firm failure, effect of regulation, first-mover advantage, rapid growth, partnerships and consumer credit.