How and why does a credit card company like Capitol One issue cards to me through 2 or more different issuers?
Credit Card
BP asked:
How can they offer me card from Capitol One and an Amazon Capitol One and a University Capitol One card and they are all different accounts. How is the money made by the issuer and the original credit card company? How does it work?
Rick
How can they offer me card from Capitol One and an Amazon Capitol One and a University Capitol One card and they are all different accounts. How is the money made by the issuer and the original credit card company? How does it work?
Rick
December 20th, 2008 at 2:52 pm
ok, I have 3 American express cards, and basically they will give you one credit limit, and divide amongst all three cards. I mean they are not going to tell you that in those exact words, but this is what they do essentially. and you will be able to switch you credit balances around from card to card as needed
December 22nd, 2008 at 9:03 am
It’s all Capital One. The other businesses use Capital One instead of their own store charge cards. Chase has similar arrangements with other stores. It seems to be a marketing tool that works for the store and Capital One.
The store makes money because you buy stuff and charge it on the card. Capital One makes money with merchant fees — there’s probably some arrangement for less fees to the store. And of course, Capital One gets interest and other fees from you.
December 22nd, 2008 at 5:59 pm
Those are the infinity groups that Capital one has contract with. For instant, BOA issues LL Bean, NFL or AAA credit cards. The bank manages the card but and the store gets the benefit for bringing in more customers while customers get free shipping and handling. With AAA, customers get gas rebate every time they use the card. Customers who have NFL account can get NFL merchandise or memorabilia and enjoy carrying the card with their favorite’s team logo..
Credit card companies also have to pay a fee to use those infinity groups’ logos. They take more risk for issuing those cards. The reason is that they pay upfront to the merchants before they can collect the money from customers. At the same time, credit card companies earn fees, interest from customers. You can have several different credit cards that may issue by the same bank or credit card company. They both get benefits for issuing the card. Some customers do not know that LL Bean is managed by BOA. They thought LL Bean itself issues the card.
It’s all about marketing. Everyone wins. The card issuers and the infinity groups.