The nation’s top three general purpose credit card issuers, who collectively control nearly 60% of the U.S. card market based on card loans, posted a 3.4% gain in outstandings and a 2.4% gain in volume for the second quarter, compared to the year ago period. The modest gains pale in comparison to the double digit gains of prior years. Bank of America, Chase and Citibank reported outstandings of $460.9 billion for 2Q/08, compared to $454.6 billion for 2Q/07, according to CardData (www.carddata.com). The top three also posted purchase volume of $238.4 billion for 2Q/08, compared to $232.8 billion one-year ago. BofA reported purchase volume for U.S. consumer and business cards of $61.0 billion for 2Q/08, compared to $56.8 billion for 1Q/08 and $61.3 for 2Q/07. Chase posted second quarter charge volume of $93.6 billion an increase of 6% from 2Q/07. Citi reported that purchase volume for North American cards was flat at $83.8 billion, compared to $83.5 billion for 2Q/07. For the latest issuer statistics for the second quarter visit CardData ([www.carddata.com](http://www.carddata.com)).
As the U.S. Olympic team heads for Beijing this month, not a single athlete or staff member will be without a Visa-branded prepaid card in his or her wallet. Bank of America and Visa have resurrected the Visa prepaid card for the U.S Olympic and Paralympic Games participants and staff. BofA, a U.S. Olympic Team sponsor since 1992, is the exclusive issuer of the Visa prepaid card for the second time, which is being offered to the entire USOC delegation for the Olympic and Paralympic Games, including more than 800 American athletes. Visa is the “Official Payment Services Brand” of the U.S. Olympic Team. The prepaid card is identifiable by the image of a U.S. flag as well as the Olympic rings and the Visa logo. BofA and Visa say the cards will help reduce administrative and processing expenses for the USOC.
Bank of America reported that its Card Services division net revenue
fell 55% to $402 million as credit costs rose by $1.21 billion.
Managed U.S. consumer and business credit card loans at the end of the
second quarter rose slightly to $163.3 billion, compared to $161.4
billion in 1Q/08 and $148.7 billion for 2Q/07. Second quarter U.S. Card
Services charge-offs rose sharply to 6.65%, compared to 5.67% in the
prior quarter and 5.21% one-year ago. However, the managed 30+ day
delinquency declined to 5.88%, compared to 5.93% in the first quarter
and 5.29% for 2Q/07. Purchase volume for U.S. consumer and business cards of $61.0 billion for 2Q/08, compared to $56.8 billion for 1Q/08 and $61.3 for 2Q/07. BofA noted that debit card purchase volume
increased 15% during the second quarter. BofA also reported that mobile
banking reached more than one million active customers in Q2.
Additionally, Card Services opened 2,212,000 accounts during the
quarter, compared to 2,042,000 accounts in the prior quarter. For
complete details on Bank of America’s 2Q/08 performance, visit CardData
BOFA EOP CARD LOAN HISTORICAL
(U.S Consumer & Business Credit Cards)
2Q/07: $148.7 billion
3Q/07: $153.0 billion
4Q/07: $161.4 billion
1Q/08: $161.4 billion
2Q/08: $163.3 billion
Source: CardData (www.carddata.com)
A report released by The Consumer Warning Network reveals secret details of a secret credit card marketing agreement between Florida State University and Bank of America. The report alleges while Florida State University is warning students via video to avoid the “credit card monster,” the university forwards names and addresses to Bank of America which then uses that information to market credit cards to FSU students as part of an “exclusive” deal allowing the bank to use FSU’s official colors and symbols. Under the agreement, FSU receives a guarantee form BoA of more than $10 million over 7 years.
Bank of America has appointed Ian O’Doherty Europe card services
executive to oversee card services businesses in Ireland, United
Kingdom, Spain and expansion efforts into other European markets. Ian
graduated from University College Dublin with a major in Civil
Engineering, the University of Missouri with a master’s degree in
Structural Engineering and Boston College with a master’s degree in
Business Administration. O’Doherty comes to the position from the role
of Ireland Country Executive to manage expansion of MBNA Ireland card
operations, the brand under which Europe Card Services operates.
Moreover, Europe Card Services was established in 1993, provides credit
cards for over 900 organizations across Europe and employs 5,000
associates while Bank of America serves over 59 million consumers and
Barclays has taken over the L.L. Bean co-branded Visa credit card program from Bank of America. MBNA, acquired by BofA in 2005, introduced the “L.L. Bean Visa” in May 1996. The new Barclays program, which launches today, features free shipping, return shipping and monogramming, a choice of three card designs, plus “Visa Platinum” or “Visa Signature” benefits. Whenever cardholders earn 10 coupon dollars, a $10 L.L.Bean coupon will be sent to them automatically via their account statement. Cardholders also receive 10 “Bonus Coupon Dollars” after their first purchase, balance transfer, or use of a “Convenience Check” within the first 90 days after the account is opened. The no annual fee card offers interest rates ranging from prime +6.74% to prime +14.74%. In conjunction with the card launch Barclays has opened a customer service operation in Wilton, Maine to serve L.L.Bean cardholders as well as those from other partner programs. MBNA formerly serviced the card via its Camden, Maine center. (CF Library 5/7/96; 7/23/98; 5/21/08)
As an official corporate sponsor of UT Athletics Longhorn Sports Network, Bank of America has introduced checking, check cards and credit card product options to appeal to Texas Longhorns students, alumni and fans. To mark the new product launch, Bank of America will be hosting an autograph signing session with UT Head Football Coach Mack Brown at its Austin banking center, to which the public is invited. Offering customized checks, Visa-branded Check Cards, MasterCard-branded credit cards and its “Keep the Change” savings program, Bank of America is encouraging consumers to sign up at any of the participating 5,700 banking centers, at select home UT Athletics events or online at http://www.bankofamerica.com/texasexes . Bank of America serves over 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,500 ATMs and online banking for 25 million active users.
After several years of probing the U.S. market, Virgin Atlantic Airways has finally teamed with Bank of America to launch the “Virgin Atlantic American Express Card.” Under the new program Virgin is offering a “White” and a “Black” card. Both co-branded cards offer three miles for every $1 spent on Virgin Atlantic purchases. The “White Card,” which has a $49 annual fee, offers one mile for every dollar in purchases, while the “Black Card,” with a $90 annual fee, enables cardholders to earn 1.5 miles per dollar spent in purchases with more opportunities to earn bonus miles. The new program also offers a 20,000 bonus miles after the first purchase, plus up to 15,000 annual bonus miles with a $25,000 spend and up to 5,000 bonus miles for additional cards. Additionally, cardholders earn one tier point for every $2,500 in purchases and additional tier points when flying Virgin Atlantic toward “Flying Club” status. There is also a 10% discount on published Virgin Atlantic “Premium Economy fares” through December 31st. Between now and the end of January 2009, for every $10,000 in spend, a cardholder is automatically entered for a chance to win a trip into space on “Virgin Galactic.”
Bank of America now has more than one million unique “Mobile Banking” customers, one year after its introduction in May 2007. “Mobile Banking” allows customers to check balances, pay bills, transfer funds, view posted and pending transactions and even locate banking centers and ATMs. Almost all customers use Bank of America’s “Mobile Banking” service to view account balances, eight in ten review transactions, while four in ten use their handhelds to transfer funds or pay bills. Frequency of use by active users continues to increase monthly, with over 4 million account sessions in May 2008 alone. Two-thirds of Bank of America’s mobile bankers are under 35 years old and four out of five are under 45 years old, as Gen Y and X consumers who have embraced mobile web technology are similarly driving mobile banking usage.
Bank of America and the Dallas Cowboys have announced a new multi-year sponsorship agreement. The 10-year agreement ensures that Bank of America will remain the Official Bank of the Dallas Cowboys and the club’s new stadium through 2019. Financial terms of the agreement were not disclosed. Under the new agreement which begins with the 2009 season, Bank of America will receive exclusive rights in the banking category; use of the Cowboys logo and other team marks in TV, radio, print and online advertising; stadium tickets and a corporate suite; in-stadium signage, ATMs and hospitality; a Dallas Cowboys fantasy camp for customers and clients; and extensive onsite advertising and tabling to promote the bank’s popular Dallas Cowboys Banking and Extra Points rewards program.
Credit card delinquency among U.S. issuers climbed 41 basis points in the first quarter and is now up 76 basis points from the year ago quarter. According to CardData, delinquency reached 5.42% in the first quarter, compared to 5.01% in the fourth quarter and 4.66% for the one-year ago. Chase reported its 30-day managed delinquency rate was 3.66% for the first quarter, up from 3.07% in the prior year and 3.48% in the prior quarter. BofA also reported its managed 30+ day delinquency rose to 5.93%, compared to 5.70% in the fourth quarter and 5.45% for 1Q/07. Additionally, Capital One posted a managed delinquency rate (30+ days) for U.S. credit cards of 4.04% for the first quarter, compared to 4.28% for 4Q/07 and 3.06% for the first quarter of 2007. (CF Library 4/16/08; 4/18/08; 4/21/08)
U.S. Card Delinquency
Source: CardData (www.carddata.com)
Bank of America is creating a new consumer banking management structure and has tapped Barbara Desoer as President of the consumer real estate operations of Countrywide Financial, Bruce Hammonds as President, Credit Card and Unsecured Lending, and Liam McGee as President of Consumer and Small Business Bank. BofA says the three represent the company’s most seasoned executives. BofA noted that deposits and cards currently account for about 95% of the profit of Global Consumer and Small Business Banking, which itself accounts for well over 60% of Bank of America’s earnings.