Yet more consolidation in the credit card industry
It was only a few weeks ago that a US credit card operation megamerger was announced, that between Bank of America and MBNA. Now, almost predictably, comes a reaction merger. British bank HSBC, which already has a big credit card presence in the US through its HSBC (formerly Household) Finance subsidiary, announced it would buy one of the last independent (that is, not owned by a large bank) operation, that of Metris Inc. The approximately $1.6 billion deal also follows last month's merger of the credit card operations of Washington Mutual and Providian.
HSBC is already the #8 credit card provider in the US. This move would make it #7. The credit card industry is now extremely lucrative in the US, thanks to usurious fees and new bankruptcy laws. That's a big boost in delivering credit to more marginal credit risks, an area Metris has specialized in.
Consolidation runs in waves, and even further buyouts are likely as the remaining companies look to bolster their share in the market and fear others will do the same. The move also marks HSBC's will to be a major player in the US and world market.
Rank of top ten credit card issuers in US
| Credit card company |
Outstanding credit ($billions) |
| Bank of America + MBNA |
143 |
| JP Morgan Chase |
135 |
| Citigroup |
116 |
| American Express |
64 |
| Capital One + Hibernia |
53 |
| Discover |
46 |
| HSBC + Metris |
26 |
| Providian + Washington Mutual |
20 |
| Wells Fargo |
14 |
| U.S. Bank |
11 |
Based on 2004 figures plus announced mergers
From WSJ chart; based on Nilson Report
3:32:23 PM 
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