A day after announcing the upcoming retirement of its CEO and that it would appoint the first female CEO of a megabank, Citigroup (C -1.06%) scored a major victory for its credit card business, according to a CNBC report.

Wayfair (W -4.98%) had been seeking a credit card co-branding partner, and Citigroup has won the rights to offer two new credit card products that bear the rapidly growing furniture retailer's name. Citi reportedly beat Alliance Data Systems (BFH -1.08%) for the partnership.

Woman selecting a credit card.

Image source: Getty Images.

Two new credit cards

Like many credit card partnerships, the Citigroup-issued cards will come in two varieties initially. There will be a store credit card that will only be accepted for Wayfair purchases, and there will also be a Mastercard version, which can be used anywhere that type of credit card is accepted.

Both cards will have a 5% rewards rate on Wayfair purchases. The Mastercard version will also earn 3% back on grocery purchases, 2% on online purchases, and 1% on all other purchases.

Also like many other retailer co-branded credit cards, there will be a promotional financing deal available. Both cards will offer no-interest financing for up to 24 months on qualifying Wayfair purchases, as well as preferential rates for longer terms. Specifically, the cards will come with a variable APR of 26.99%, but financing for up to 60 months at a 9.99% APR will be available for major purchases.

Why it matters

This is a big win for Citigroup, which also offers credit cards in partnership with American Airlines (AAL -2.14%) and Costco (COST 0.54%), just to name a few. Wayfair generated $4.3 billion in sales during the second quarter, representing year-over-year growth of 84%. As of June 30, the company's direct retail business had 26 million active customers. To put it mildly, this is a large group of consumers Citigroup could bring into its lending business.