Originally Posted by
WasKnown
As surprising as it may be to people in the points and miles game, the active account figures for the Venture X are not satisfactory. Capital One is not very good at underwriting prime and super prime customers and is even worse at figuring out how to monetize them. I’m not too impressed with their attempt to convert select users to charge cards in an attempt (presumably) to drive more interchange revenue.
Interesting discussion. Can you point us to some specific reports or disclosures addressing this? What are the charge card products they are pushing, or are you simply inferring that the highest cash-back/rewards focused products are positioned as "charge cards" in that the target audience tends to not carry a balance. Capital One certainly has developed products that appeal to this audience, IMHO, and their customer service seems to have improved in recent years to support these cards.
Originally Posted by
WasKnown
What Chase has accomplished with the Sapphire cards (particularly the CSP in recent years) is nothing short of incredible. I don’t expect them to lead the charge for anything because they simply do not have to.
Chase built quite a mountain, but others are starting to chip away at its foundation and, without innovation on Chase's part, will continue to do so. At this stage, still, I'd guess the numbers signing up for the "perfect starter" rewards card still dwarf those downgrading because they have replaced Chase Sapphire with Bilt, Capital One, Amex Gold, etc. The development of the lounge network, while welcome, is certainly an indicator that the CSR, at $550/yr, had become less relevant than it once (thus, the innovation).
Originally Posted by
WasKnown
During the great Meta capitulation, Visa market cap even flipped meta to become a top 10 company by market cap.
Visa certainly positioned itself to ride the wave of some very profitable portfolios (Chase Sapphire/United/Costco)
I wonder if this also frees up capital because they (perhaps) no longer need to calculate loss reserves based on the full revolving credit line?
Originally Posted by
WasKnown
Perhaps. I would be surprised if this was a large difference as they are likely targeting transactors specifically for the charge card conversions.
Certainly, shifting the quality of new accounts/total exposure toward prime/super-prime would help, but whether the new customer acquisitions are for revolving or charge type accounts would not seem to have an impact within this category of customer, IMHO. Shifting existing accounts to different products would not seem to have an impact on overall risk exposure (not to mention that the lowest risk customers are really the target audience for charge products). I've not dug through Capital One's financial disclosures, but could not find any search references to "charge card conversions" and Capital One.