Have you ever noticed that there only seem to be a handful of credit card issuing banks? Well, I have. So, I thought I would do a little investigating into just how many players are participating in the credit card industry game. What I have found is that there really are only a few big names dominating the industry. This is largely due to the major consolidations that have taken place in the credit card industry. Consider this: in 1990, there were ten credit card issuers holding onto 56.5% of the market. By 2004, these same ten companies had 89.5% of the industry in their clutches. Visa and MasterCard held 70%.
The ’90′s didn’t wrap up the purchase frenzy. In 2000, MBNA paid $6 billion to purchase First Union while Citi purchased Associates for the same amount. In 2001, Bank One took hold of Wachovia for $7 billion and Chase coughed up $8 for Providian. In 2003, Citi bought Sears for $11 billion and HSBC bought Household for $17 billion.
In 2004, the really big bucks started rolling (as if $11 billion isn’t already a large enough sum!) when JP Morgan Chase bought Bank One for an amazing $76 billion! That same year, Bank of America bought Fleet for $17 billion. In 2005, Bank of America merged with MBNA for $35 billion and Washington Mutual purchased Providian Financial for a cool $6.5 billion.
With so many big dollars out there to be made from millions of cardholders willing to spend, spend, spend on their credit cards, it is no wonder these major credit card companies are willing to put down large amounts of money to buy out other companies. In 2005, Bank of America alone held claim to 40 million active credit card accounts that accounted for $143 billion in balances. That’s nothing to sneeze at.
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