MasterCard and Capital One Look to Grow Businesses
March 16 2012 - 7:20AM
Marketwired
Credit card companies have posted impressive results of late. With
the U.S. economy once again showing signs of growth, studies show
that consumers are charging more on their credit cards over the
last year. Five Star Equities examines the outlook for companies in
the credit card industry and provides equity research on MasterCard
Inc. (NYSE: MA) and Capital One Financial Corporation (NYSE: COF).
Access to the full company reports can be found at:
www.fivestarequities.com/MA www.fivestarequities.com/COF
A recent study, conducted by the credit card comparison website
CardHub, found that consumers continue charging more on their
credit cards. The report finds Americans accumulated nearly $48
billion in new credit card debt in 2011, 424 percent more than what
they charged in 2010, and 577 percent more than in 2009. Although
total outstanding credit rose only about $4 billion, that number
was largely offset by the magnitude of consumer defaults--$44.2
billion. "First-quarter pay-downs have become less significant and
the amount of new debt added in each subsequent quarter has grown
compared to its respective counterparts in the previous two years,"
the report said.
Five Star Equities releases regular market updates on the credit
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Greg McBride, senior financial analyst at Bankrate.com, explains
that card issuers were aggressive in writing off bad debt in 2009
and 2012. "That's why over the last year or so they've been out
actively seeking to grow their business," McBride argues.
One way credit card companies are expanding their reach is with
mobile payment and online ventures. As reported last month in The
Wall Street Journal, J.P. Morgan Chase & Co., Capital One
Financial Corp. and Barclays PLC will enable their customers to use
a mobile-payments service being developed by several wireless
carriers starting this summer.
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