What does it take to slay the competition on the credit card issuer playing
field? For starters you'll need to cough up more than $1.1 billion in annual
marketing expenses. You will also need state-of-the-art information technology
capable of harvesting terabyte farms of consumer data. Also add to the mix a
full line of thoughtfully designed card products. These ingredients of success
are part of Capital One's arsenal. Last year, the Virginia-based issuer
creamed the competition by growing its card business more than 69%. The closest, major
competitor, was Providian, which grew a mere 23%. On average, the top ten U.S.
issuers of bank credit cards grew 11% last year. Even though it spent $1.087
billion on marketing, Capital One has almost a surgical approach on which
products it offers certain consumers. The issuer has also focused on the more
profitable, lower balance accounts, leaving its competitors fight over the
lower yielding super-prime accounts. Capital One continues to issue credit
cards with initial credit limits of $300 or less. During 2001, the issuer
launched a major campaign for its "No Hassle" credit cards which promise no
telemarketing calls or nuisance pricing.
TOP TEN 2001
ISSUER CARD LOANS CHANGE
1. Citibank $108.9b* +5.5%
2. MBNA $ 74.9b +6.4%
3. First USA $ 68.2b +1.8%
4. Discover $ 49.3b* +4.7%
5. Chase $ 40.9b +13.0%
6. Capital One $ 38.4b* +69.2%
7. Providian $ 32.9b +23.2%
8. American Express $ 32.0b +11.5%
9. Bank of America $ 27.2b +18.3%
10. Household $ 16.1b + 5.9%
TOTAL $488.8b +11.0%
* Citibank includes data from Canada and Mexico; Capital One may include some
international data; Discover data as of 11/30/01
Source: CardData (www.carddata.com) RAM Research Group’s Bankcard Barometer
What does it take to slay the competition on the credit card issuer playing
field? For starters you'll need to cough up more than $1.1 billion in annual
marketing expenses. You will also need state-of-the-art information technology
capable of harvesting terabyte farms of consumer data. Also add to the mix a
full line of thoughtfully designed card products. These ingredients of success
are part of Capital One's arsenal. Last year, the Virginia-based issuer
creamed the competition by growing its card business more than 69%. The closest, major
competitor, was Providian, which grew a mere 23%. On average, the top ten U.S.
issuers of bank credit cards grew 11% last year. Even though it spent $1.087
billion on marketing, Capital One has almost a surgical approach on which
products it offers certain consumers. The issuer has also focused on the more
profitable, lower balance accounts, leaving its competitors fight over the
lower yielding super-prime accounts. Capital One continues to issue credit
cards with initial credit limits of $300 or less. During 2001, the issuer
launched a major campaign for its "No Hassle" credit cards which promise no
telemarketing calls or nuisance pricing.