Credit Card Lenders Keep Getting Pickier: American Banker

Discussion in 'General Discussion | Credit Cards' started by jbcarioca, Feb 13, 2013.  |  Print Topic

  1. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    This is from the American Banker today. It is subscription only so here is the link if you have access:
    http://www.americanbanker.com/issue..._medium=email&utm_campaign=AB_Intraday_021313

    This really is not news because we've known credit was tightening and deals becoming less generous for a long time. The graphics are very interesting but do have access restricted to subscribers.

    The major news is that CapitalOne continues to be the biggest player among poorer credit risk people and American Express the biggest among those with the best credit. No surprise there, but every major issuer has tightened credit standards.

    "The percentage of securitized loans extended to cardholders with FICO scores above 720 increased from 2011 to 2012 at American Express (AXP), Bank of America (BAC) and Discover (DFS), adding to gains in preceding years. The share at JPMorgan Chase (JPM) retreated a bit in 2012, but the bank’s percentage of loans to cardholders with scores below 660 continued to drop as cardholders in the middle of the credit spectrum closed the gap.

    Some issuers did not make disclosures about credit score compositions in certain years, but overall, credit history profiles have improved across the board since 2007.

    The biggest transformation occurred at B of A, where chargeoff rates peaked at a much higher level than at competitors, and where the proportion of loans to borrowers with FICO scores above 720 increased by 15 percentage points to 52% during the time considered here.

    Data on securitized receivables provides an incomplete picture of credit card businesses that include large volumes of loans that do not back bonds. But credit score information offers valuable hints about strategies at different lenders, which tend to concentrate billions of dollars of marketing expenditures on different customer segments.

    Amex remains the issuer with the largest proportion of high credit score accounts, and the lowest proportion of low score accounts. It focuses on affluent customers who spend large amounts on their accounts and tend to pay off their bills every month, though it told investors at a conference this week that it would like to capture more of the borrowing that its cardholders do elsewhere.

    Capital One’s securitized portfolio retains a relatively low proportion of high score accounts, though it, like its peers, has gravitated away from the low end in recent years."
     
    wrxmom, iolaire, LETTERBOY and 2 others like this.
  2. autolycus

    autolycus Gold Member

    Messages:
    2,136
    Likes Received:
    7,321
    Status Points:
    5,000
    One possible solution to this: offer more bonus points, transfer partners and other perks for actual spending than Chase does! :)
     
  3. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    Their comments to Investors on that subject are something of a tradition, although they never work too hard to change things. After all people pay enormous fees for Centurion and Platinum cards, fees that go right to the bottom line because the benefits typically cost American Express nothing significant. They do seem to try to get more revolvers from time to time, especially with their cobrand cards.
     
    LETTERBOY and autolycus like this.
  4. autolycus

    autolycus Gold Member

    Messages:
    2,136
    Likes Received:
    7,321
    Status Points:
    5,000
    I'm sure. I imagine it's similar to DirecTV's quarterly conference call comments on wanting to lower their customer churn rate. If they had a churn rate of .00001%, they'd still say lowering that rate is one of their goals for the future.
     
    jbcarioca likes this.
  5. robertw477

    robertw477 Silver Member

    Messages:
    73
    Likes Received:
    77
    Status Points:
    295
    I see nothing ground breaking in that article. If you have a good score you will have ZERO problems getting the good bonus cards and deals. Worst case is you have to reallocate credit with some grantors. BTW I find Cap One extremely easy to deal with as a person with excellent credit. They have some decent products and many people hate them. I think the people who hate them carry balances, and Cap One has some of the highest rate for anyone carrying a balance.
     
    jbcarioca likes this.
  6. Boraxo

    Boraxo Silver Member

    Messages:
    145
    Likes Received:
    139
    Status Points:
    420
    No, worst case is you get denied plus minus points for the inquiry. Re-allocating your existing credit lines with Chase is no big deal" they are happy to do it and you simply move it around as you like.

    +1 on CapOne, had them for years and never a problem. A friend recently called them to ask for a better reward program (she was getting 1% on very high spend) and they immediately offered her 2%, no questions asked (and no annual fee). Heck, I'm gonna make that call myself, 2% is not bad for everyday spend.
     
    jbcarioca likes this.
  7. LETTERBOY
    Original Member

    LETTERBOY Gold Member

    Messages:
    1,650
    Likes Received:
    2,522
    Status Points:
    1,425
    You can say this about any large company. With any large company/organization, some will love them, some will hate them.
     
    jbcarioca likes this.

Share This Page