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Capital one bucket questions

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Anonymous
Not applicable

Re: Capital one bucket questions


@wasCB14 wrote:

@Anonymous wrote:

@wasCB14 wrote:
Customers aren't bucketed, accounts are.

Usage doesn't change an account's bucket (a category, good or bad, noting the expected risk level of the debt) once the debt has been securitized and sold to investors.

This isn't true. Capital One does shift customer buckets around with time. For example, their top tier bucket doesn't have any accounts under 5 years old in it. 

This is 2019 on their top tier Class A. Note that it says the average age of accounts in this tranche is 170 months and no accounts are under 60. Bottom of page 4, Table 2 

https://www.spratings.com/documents/20184/0/Capital+One+Multi-Asset+Execution+Trust+%28Class+A%282019-1%29%29.pdf/55f5111d-2b54-29a9-4728-f55d5f7668b3

The problem is that rebucketing takes time, a lot more than most are willing to spend when there are better cards out there. If I knew about this place when I started my rebuild, I wouldn't have just run with my Plat/QS from 2014 to 2016 as my only card and I would most likely not have the limit I do today. 


I know I misunderstand some things about the process, but I don't really follow your logic, either.

 

I didn't say the bucket (whether it applies to a customer, an account, or a receivable) was fixed at the time the card application was approved and the account created. I said it didn't change once the debt was securitized and sold to investors.

 

Showing me a snapshot of what a bucket looks like at the time of securitization is not proof of anything (a customer, an account, a receivable) "jumping" from one bucket to another after securitization.


If there is a tranche that has no accounts less than 60 months old in it, it's impossible for Capital One to not rebucket customers. 

There are plenty of us who have broken well past what our bucket would seemingly dictate. Rebucketing is the logical explanation. 

Message 11 of 15
wasCB14
Super Contributor

Re: Capital one bucket questions


@Anonymous wrote:

@wasCB14 wrote:

@Anonymous wrote:

@wasCB14 wrote:
Customers aren't bucketed, accounts are.

Usage doesn't change an account's bucket (a category, good or bad, noting the expected risk level of the debt) once the debt has been securitized and sold to investors.

This isn't true. Capital One does shift customer buckets around with time. For example, their top tier bucket doesn't have any accounts under 5 years old in it. 

This is 2019 on their top tier Class A. Note that it says the average age of accounts in this tranche is 170 months and no accounts are under 60. Bottom of page 4, Table 2 

https://www.spratings.com/documents/20184/0/Capital+One+Multi-Asset+Execution+Trust+%28Class+A%282019-1%29%29.pdf/55f5111d-2b54-29a9-4728-f55d5f7668b3

The problem is that rebucketing takes time, a lot more than most are willing to spend when there are better cards out there. If I knew about this place when I started my rebuild, I wouldn't have just run with my Plat/QS from 2014 to 2016 as my only card and I would most likely not have the limit I do today. 


I know I misunderstand some things about the process, but I don't really follow your logic, either.

 

I didn't say the bucket (whether it applies to a customer, an account, or a receivable) was fixed at the time the card application was approved and the account created. I said it didn't change once the debt was securitized and sold to investors.

 

Showing me a snapshot of what a bucket looks like at the time of securitization is not proof of anything (a customer, an account, a receivable) "jumping" from one bucket to another after securitization.


If there is a tranche that has no accounts less than 60 months old in it, it's impossible for Capital One to not rebucket customers. 

There are plenty of us who have broken well past what our bucket would seemingly dictate. Rebucketing is the logical explanation. 


So how do you know the year in which your debt was securitized?

Personal spend: Amex Gold, Amex Schwab Plat., BofA PR+CCR(x2), Costco
Business use: Amex Bus. Plat., BBP, Lowes Amex AU, CFU AU
Perks: Delta Plat., United Explorer, IHG49, Hyatt, "Old SPG"
Mostly SD: Freedom Flex, Freedom, Arrival
Upgrade/Downgrade games: ED, BCE
SUB chasing: AA Platinum Select
Message 12 of 15
Anonymous
Not applicable

Re: Capital one bucket questions


@wasCB14 wrote:

@Anonymous wrote:

@wasCB14 wrote:

@Anonymous wrote:

@wasCB14 wrote:
Customers aren't bucketed, accounts are.

Usage doesn't change an account's bucket (a category, good or bad, noting the expected risk level of the debt) once the debt has been securitized and sold to investors.

This isn't true. Capital One does shift customer buckets around with time. For example, their top tier bucket doesn't have any accounts under 5 years old in it. 

This is 2019 on their top tier Class A. Note that it says the average age of accounts in this tranche is 170 months and no accounts are under 60. Bottom of page 4, Table 2 

https://www.spratings.com/documents/20184/0/Capital+One+Multi-Asset+Execution+Trust+%28Class+A%282019-1%29%29.pdf/55f5111d-2b54-29a9-4728-f55d5f7668b3

The problem is that rebucketing takes time, a lot more than most are willing to spend when there are better cards out there. If I knew about this place when I started my rebuild, I wouldn't have just run with my Plat/QS from 2014 to 2016 as my only card and I would most likely not have the limit I do today. 


I know I misunderstand some things about the process, but I don't really follow your logic, either.

 

I didn't say the bucket (whether it applies to a customer, an account, or a receivable) was fixed at the time the card application was approved and the account created. I said it didn't change once the debt was securitized and sold to investors.

 

Showing me a snapshot of what a bucket looks like at the time of securitization is not proof of anything (a customer, an account, a receivable) "jumping" from one bucket to another after securitization.


If there is a tranche that has no accounts less than 60 months old in it, it's impossible for Capital One to not rebucket customers. 

There are plenty of us who have broken well past what our bucket would seemingly dictate. Rebucketing is the logical explanation. 


So how do you know the year in which your debt was securitized?


I have no idea what year it was but that really shouldn't matter either. I'm sure Capital One can adjust the tranches to keep them all at investor expectations but what I can say for sure is that going back to the first COMET document I saw in 2017, the A tranche hasn't changed from the requirement of no accounts under 60 months in it. I didn't dig back any further but it's probably a pretty safe assumption that requirement has been there for awhile which tells me that there's no way they don't move customers across tranches. 

This discussion is really best for another thread though. I just hate how it gets parroted that cards are bucketed for life when everybody gets better cards well before the point where Capital One really opens up around the second/third year. Most of us who used our Capital One cards as our only card with heavy spend have seen growth that would be in line of expectations for higher buckets - 20%+ utilization to get a CLI. 

Message 13 of 15
wasCB14
Super Contributor

Re: Capital one bucket questions

My understanding of the process is that Cap1 keeps a portion of CC accounts on its own books for a few years before securitizing the debts. If a starter account opened in 2013 isn't packaged until 2019, then it can still go into the A bucket (at the time of securitization in 2019) if the customer's profile has improved since 2013. If it was instead packaged in 2014, it would have gone into a riskier bucket. Again, the bucket isn't determined unless and until the asset is sold to investors. I don't see how people can say they jumped buckets after the debt was securitized without knowing when their accounts were actually securitized.

 

My understanding is that the 2017 securitization has a fixed set of assets with fixed buckets that do not change based on how a customer profile looks in 2019, and that the 2019 securitization has a different set of assets that go to pay off a different set of investors.

 

So where exactly am I mistaken here? Maybe someone else can explain it to me, as @Anonymous and I seem to be going in circles?

Personal spend: Amex Gold, Amex Schwab Plat., BofA PR+CCR(x2), Costco
Business use: Amex Bus. Plat., BBP, Lowes Amex AU, CFU AU
Perks: Delta Plat., United Explorer, IHG49, Hyatt, "Old SPG"
Mostly SD: Freedom Flex, Freedom, Arrival
Upgrade/Downgrade games: ED, BCE
SUB chasing: AA Platinum Select
Message 14 of 15
Anonymous
Not applicable

Re: Capital one bucket questions


@wasCB14 wrote:

My understanding of the process is that Cap1 keeps a portion of CC accounts on its own books for a few years before securitizing the debts. If a starter account opened in 2013 isn't packaged until 2019, then it can still go into the A bucket (at the time of securitization in 2019) if the customer's profile has improved since 2013. If it was instead packaged in 2014, it would have gone into a riskier bucket. Again, the bucket isn't determined unless and until the asset is sold to investors. I don't see how people can say they jumped buckets after the debt was securitized without knowing when their accounts were actually securitized.

 

My understanding is that the 2017 securitization has a fixed set of assets with fixed buckets that do not change based on how a customer profile looks in 2019, and that the 2019 securitization has a different set of assets that go to pay off a different set of investors.

 

So where exactly am I mistaken here? Maybe someone else can explain it to me, as @Anonymous and I seem to be going in circles?


I mean if Capital One is holding these accounts for years before securitizing them and they never change them after that then you have made my argument for me and nobody is stuck in a starter bucket for a few years anyway. 

My point is that cards that start low can and do grow with time if they are actually used the way Capital One wants them to be used. If we are running on the assumption that Capital One doesn't change buckets once securitized and we know that their top tranche has no accounts less than 5 years old in it then everyone has years to prove themselves to Capital One before they end up bucketed. 

Message 15 of 15
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