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