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Is credit card industry lucrative???

Frequent Contributor

Is credit card industry lucrative???

Why Chase has such a big market share of credit cards while Wells Fargo seems to show minimal interest of these platcis? Smiley Frustrated   They don't profit or what?

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Message 1 of 27
26 REPLIES
Frequent Contributor

Re: Is credit card industry lucrative???

Chase is large bank that got that way by buying out lots of smaller banks. Just like Bank of America, CitiGroup, and others, they are very aggressive marketers in a highly competitve market.

For these banks, credit cards are an extremely lucrative part of their business.

I think of it like this:  If you have One-Million Dollars to invest - would you prefer to loan it to one guy (in the form of a mortgage), receiving 4% return on your money over a long term ?

Or would you rather issue 1000 credit cards, receiving a 15% return in the short term?

All banks would like to achieve maximum returns on their investments - in fact they are required to, if they don't want their stockholders to leave for greener pastures.

It's just that some banks have made bigger investments in positioning their cards to achieve greater market dominance.

Message 2 of 27
Valued Contributor

Re: Is credit card industry lucrative???

Overall bank size is going to play a large role in how active they can get in credit cards.  It's a fairly risky business and they have to be able to spread those risks out and keep it in line with their overall size.  Chase is a much larger bank and therefor can be more active in the CC market. 

Message 3 of 27
Blogger

Re: Is credit card industry lucrative???

Guys, Wells Fargo is huge. They are 4 times as big as US Bank. It's not about size.

Message 4 of 27
Frequent Contributor

Re: Is credit card industry lucrative???


HiLine wrote:

Guys, Wells Fargo is huge. They are 4 times as big as US Bank. It's not about size.


+1. WF is the 4th largest bank in the US. PNC bank(12) is also a huge bank that lacks good CC selection. Bigger than AMEX(19) and Discover(33) in terms of assets.

 

http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx

 



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Message 5 of 27
Valued Contributor

Re: Is credit card industry lucrative???

Yes, it's lucrative.

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Message 6 of 27
Mega Contributor

Re: Is credit card industry lucrative???


bribro wrote:

Yes, it's lucrative.


Very lucrative!!!! Especially when their cardmembers do not PIF Smiley Very Happy




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Message 7 of 27
Super Contributor

Re: Is credit card industry lucrative???

So lucrative that they are constantly changing offerings and incentives to gain market shares of a very profitable business

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 8 of 27
Established Contributor

Re: Is credit card industry lucrative???


HiLine wrote:

Guys, Wells Fargo is huge. They are 4 times as big as US Bank. It's not about size.




 

But size does matter....

 

Just sayin'.

Message 9 of 27
Regular Contributor

Re: Is credit card industry lucrative???

Certainly it is. There are what, 600 million credit cards in the US alone. My horror story was a $400 INTEREST charge (yikes). I'd say especially lucrative towards people who aren't half knowledgable about credit.
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Message 10 of 27