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Credit Card Consolidation

in Bank, Banks, Credit Cards, Debts


At the Banks Not at Home

I noticed a while ago that my Citi Mastercard was going to become a CIBC Mastercard, in the near future. This is interesting as I used to have a CIBC Card, and the Citi Mastercard, was previously CT Mastercard (but when TD bought CT, then Citi bought the CT Mastercard business). Confusing isn’t it (I am surprised I even remember this).

Yesterday I noted that TD is now buying the Canadian Credit Card operations of the Bank of America, so if you have a Bank of America card (MBNA) , it will most likely be turning into a TD Visa card (some time in the future), and TD is putting upwards of $100 Million into this transaction (in purchase price and debt assumed, etc.,).

As a TD Shareholder this is good because it doubles TD’s penetration into the market, but bad because a lot of the MBNA card holders are higher riskfolks as well, but TD says they will be running off about $2Billion worth of customer debt over 2 years because of these risks (which sounds

Bloated Wallet

My Bloated Wallet Might get Smaller with Less Credit Cards

prudent). Whether they are simply going to write off the debt, is not clear to me, but hopefully they will simply close off the accounts after they are paid off (maybe that is being a little too optimistic in most cases). Another option would be to sell the debt to collection agencies (a little more drachonian, but possible as well).

With more consolidation of the credit card business does this mean there is still a lot of money to be made off credit cards? I think the market is telling us that yes there is more money to be made.

I hope this means I will have less credit cards in my wallet, but then again I could fix that one myself by cancelling a few of them myself.

It will be interesting to see if there are more of these kind of credit card consolidations for the Bank side of things.



  • burberry October 31, 2011, 11:18 PM

    MBNA MasterCards are not going to become TD Visas; they will become TD MasterCards. This transaction will make TD a dual issuer of Visas and MasterCards. I have been with MBNA since 2007 and TD since I was a child. TD will make money by doing this. Then know consumers carry both cards and want to offer both. They will recoup their investment slowly but it’ll happen. MBNA gives out cards willy-nilly whereas TD is more cautious giving credit (as they should be). I think TD will definitely get rid of the low promotional rates and slap on annual fees to cards that provide rewards. Eventually both TD Visas and TD MasterCards will be virtually the same. Time will show this.

  • Jeff August 17, 2011, 1:13 PM

    My understanding of the deal is that TD will turn your MBNA Mastercard (mine as well) into a TD Mastercard.

    When I had the MBNA SPG Mastercard and MBNA lost the franchise on a Canadian SPG credit card to Amex, I was offered the signup bonus again to switch to another MBNA credit card. I’m optimistic for the same treatment when TD phases out the MBNA travel points program in favour of the TD travel rewards program.

    I’m happy to see the end of MBNA’s sorry excuse for a customer website, and one more credit account show up on Easyweb.

    • bigcajunman August 17, 2011, 1:38 PM

      No such thing as a TD Mastercard, you get a TD Visa Card, yee haw!

  • Dave August 17, 2011, 1:10 PM

    I think these mergers are very bad for consumers since they diminish choice. The big five already dominated the Visa side of the market and now they are doing the same for Mastercard. Foreign companies (especially American) provide more variety and innovative products than local companies. The era of no annual fee cards will soon be gone.

    My brokerage was bought by Scotia. I used to be able to live without any of the big five before 2008. Not any more…very sad!

  • DanP August 17, 2011, 1:19 PM

    I was suprised to see that TD bought this debt. I fugure anything that bank of america is selling probably isn’t worth buying. But my only concern is lack of competition. With less and less options, it makes companies like TD so much stronger and at some point it will get scary.

    Also, I bet TD is alot smarter than BoA so they will get ready of my really cheap balance transfers. I enjoyed using those 0% transfers for 15 months. I had some amazing financial sucessess with those.


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