Capital One Copes as Clients Kick Habits

[FarCenter]

By Jonathan Starkey - Washington Post Staff Writer - Monday, August 10, 2009

Credit card giant Capital One Financial has traditionally made good money in fees from customers who pay late but ultimately pay up and others who rack up charges and surpass their credit limits. But during the recent downturn, some customers appear to be changing their habits.

Many have witnessed the financial turmoil and threats of layoffs and taken a more disciplined view of their finances, making sure to submit payments on time and adhere to limits. Meanwhile, a greater percentage of the balances that are falling behind are coasting all the way through the delinquency process and piling up as losses.

The pattern, not unique to any one credit issuer during the downturn, analysts say, has presented another in a series of challenges for the McLean-based company, which is already wrestling with new federal regulations that threaten to dismantle its old way of doing business.

"I think we are seeing some consumer behavior change where people are paying attention to their financial situation, keeping an eye on keeping their score intact," said Christopher Brendler, an analyst at Stifel Nicolaus. "Credit card make a lot of money on sloppy payers, people who pay you but pay you late. The worst case for credit card companies is when everyone who pays you late charges off."

<snip> http://www.washingtonpost.com/wp-dyn/content/article/2009/08/09/AR2009080902095.html

[DebbieCDC]

1. May they crash and burn

One of the most abusive cc companies out there.

[Bluzmann57]

2. I have a card from them

It expires in November. I intend to let it expire then. I don't need it and I am not alone. They just don't need my money. Not as much as I do anyway.