Capital One Banking, a bank which specializes mostly in credit cards and other personal loans. Based in MacLean, Virginia, it boasts of international offices located in Canada, United Kingdom and Spain mainly operating for credit card market only. It ventured into the field of retail banking when it acquired the Hibernia National Bank in the year 2005. Thereafter succeeding acquisitions made in 2006 and 2008 expanded Capital One’s deposit base. However, the company was forced to dump its mortgage platform in 2007 due to the increasing pressures put up by its investors.
Users of Capital One Banking's internet service provisions are mostly customers availing of the company’s car financing deals. The online service lets a customer apply for a new auto loan or request for a refinancing of an existing auto loan. This financial institution received numerous criticisms due to its policy of granting multiple credit cards to individuals at low limits. As a result the company gains from excessive spending and surcharges for late payments, considered by some sectors as a predatory technique.
Online savings account at Capital One assumed a different profile when the company introduced its High Yield Money Market savings account. In spite of its high annual percentage yield, a customer can open this type of account even for just a dollar; hence no minimum balance is required. A variation to this type of savings account online is the Money Market account which requires a minimum balance of 100. It comes along with a debit card aside from the usual checks. However since this is a money market form of investment, there is a 10-day retention period before any withdrawals are allowed.
Unfortunately, these marketing strategies seemed to have very little effect in establishing Capital One as a formidable institution in the banking industry. Only recently, Capital One Banking admitted that it is suffering from losses as more customers have defaulted in their loan payments. Rate of credit card default rose from 3.56 in 2007, to 6.26 as of the first quarter in 2008. The company went as far as admitting that their retail banking and auto financing activities did not perform well either. In a more recent statement, the company reported to have improved their earnings as of 2008’s 2nd quarter but is still struggling with its new strategy of catering only to low-risk clients. Critics must be sniggering at Capital One’s sudden turnabout.
