Bank credit card oligopoly in 2006
An excellent article on the credit card oligopoly appears on the site Law Mall .The article updates and extends what we have written earlier on the subject (linking to this site)..
Here's a rundown of the article, which deserves a look:
3 banks in the United States own a 65% to 70% share of the credit card market. Namely: #1 - Bank of America/MBNA; #2 - Citigroup; and #3 - Chase/Bank One.
Six years earlier, in 2000, the top 10 credit card companies owned collectively 75% of the credit card market. Since that time #5 BOA bought #2 MBNA and #4 Chase Manhattan bought #3 Bank One.
The effect of, this according to the author, has been :
- Larger banks charge higher fees (based on Bank Rate Monitor)
- The average fees charged by multi state banks are significantly higher than those charged by single-state banks.
- Bank mergers lower interest on consumer deposits.
- Small business lending receives short shrift in a world of ever-larger banks
- Large bank mergers are undermining Visa and MasterCard, neutral issuers thatwork through big and small banks alike, potentially making it harder for small banks.
An interesting read with some good sourcing. Note that I am quoting some of the site verbatim
