The retailer may sell its credit card receivables, worth $7 billion.

MINNEAPOLIS -- Target shares rose nearly 3 percent Thursday after it said it might shop around almost $7 billion that its customers owe on the credit cards it issues.

Target also said it was examining the pace of its share repurchases. Analysts said they expect that Target might use the money it gets for selling its credit card receivables to pay for share repurchases.

Target shares rose $1.70, or 2.7 percent, to close at $64.42 on Thursday.

Target also said it would keep its long-term debt ratings in the "A" category. Still, Fitch Ratings and Standard & Poor's Ratings Services on Thursday both put the company on credit watch for a possible downgrade. Both said they might reduce Target's long-term rating by one notch.

"This is a big deal," said Tiffany Co, an analyst at Fitch of the plan to sell the credit card debt. "I think it could be a possible shift in their financial strategy."

"They've always been very prudent in their financial management," she said.

Target earned a 13 percent return on its credit cards for the year that ended in February. Target has said repeatedly that it is a profitable, growing business that drives extra sales at Target stores. Target cards contributed $693 million, or 15 percent, of Target's pretax profits for the year.

But the credit card operation has made some investors nervous because it leaves Target with the risk of unexpected defaults.

"I think at a price, anything's for sale. And that's the right, flexible attitude to have," said Robert Buchanan, an analyst at A.G. Edwards & Sons. He said he thought Target would only sell the credit card debt if someone was willing to pay a premium for it.

That could be the tricky part. Rising mortgage delinquencies have made investors nervous about other kinds of debt, too.

JPMorgan analyst Charles Grom wrote in a note that Target's timing seems odd. But, he wrote, "a credit card sale coupled with a more aggressive buyback campaign has the potential to be nicely accretive to" earnings per share.

Most other retailers have sold their credit card receivables in recent years. That didn't mean they stopped issuing credit cards -- just that someone else owned the debt, and collected the profit from interest payments.

For instance, discount department store Kohl's Corp. sold $1.5 billion in credit card accounts to JPMorgan Chase & Co. in March 2006. Kohl's continued to handle the customer service and marketing for the cards, as Target has said it would do if it eventually sells its credit card receivables.

Target said it expects its review of its alternatives will be finished by December.