Originally Posted by
christianj
I'm having a hard time following your logic on C1 not being successful.
Originally Posted by
NYC Flyer
Agree. Venture X seems to have some crossover appeal vs both CSR and CSP, as the net cost of the card is pretty much zero. I have replaced CSP with Bilt (zero annual fee, 3x dining, UA, Hyatt and AA transfers) and use Venture X for non-bonused spend and will likely drop to a no-fee Chase card to keep the credit line at renewal.
Charge card conversions is not an argument that the Venture X is performing poorly. It is the result of that poor performance.
What is already shown in their most recent 10K is revealing enough. Despite a massive increase in active accounts, payment volume is almost flat. For their credit card business, income from continuing operations net of tax is at 4.9 billion for 2022 down from 7.8 billion in 2021. Most interestingly, their net charge-off rate for 2022 is 2.53% (up from 1.90% in 2021).
If we look more recently, Capital One as a whole is obviously doing quite poorly having missed analyst expectations for EPS by 40.56% for Q1 2023. In ER they specifically cited "worsening credit in their domestic credit card portfolio" as major reasoning that led to their $1.1 billion allowance for credit losses. Their 2023 Q1 income from continuing operations net of tax (again for the credit card business) was at 549 million which is down from 1.5 billion for the same 3 months a year ago. Their net-charge-off rate is up to 4.06% for this period from 2.18% for the same period last year.
Capital One would like to position itself as a tech company but I think they would benefit from getting better at underwriting before they go off too far in that direction.
Originally Posted by
NYC Flyer
Not at all. I suppose I was responding primarily to the emphasis on what Chase had accomplished with Sapphire cards, rather than their entire card business. As I previously conceded, it's quite possible acquisitions may still be outpacing defections due to sign up bonuses and the constant promotion of CSP as the "perfect starter" points card. I know many who downgraded their Reserve cards when the fees increased (and see the introduction of the Chase lounges as an acknowledgement that the CSR needed more benefits to sustain/grow the portfolio).
I'm not sure by what metric Chase is struggling... As we have discussed, its credit card business has only been growing. In terms of consumer deposit market share, Chase has grown year over year for almost every year since 2018 with the exception being 2021. In 2021 it ran flat whereas its largest competitors (Bank of America and Wells Fargo) both meaningfully contracted. And nominally, obviously, Chase has grown its deposits business year over year regardless of market share.
You and christianj are speaking anecdotally about your own experiences and observations with the cards. Those are perfectly valid in the context of your preferences. However, it is not a reliable heuristic for what is happening at a large scale with these banks. As they are publicly traded companies, we can rely on data and not personal anecdote to draw conclusions.
I agree that C1 Venture X has a rich value proposition. I am no fan of Chase credit card products as my post history dumping on their cards shows. But my view on this is grounded in the facts I have laid out rather than my personal opinion as a prospective customer.