While reading the Washington Post website this morning I noticed a report that Capital One is suffering thanks to better cardholder behavior. I guess good news for consumers is often times bad news for banks.
It seems that Capital One’s customers have become better at paying their bills on time and not going over their limits. As CEO Richard Fairbank put it on a conference call, “we continue to see customers behaving defensively in the economic environment.”(One assumes that “defensively” is banker-speak for “responsibly.”)
As the reality of the harsh economic climate continues to hit consumers, we have apparently begun to wisen up and take better care of our finances. Paying more attention to credit card limits and payments is a good first step. Personally, I have also (mostly) eliminated my morning Starbucks run and am snowflaking the savings to more quickly pay down student loan debt.
Of course, credit card companies have already raised rates (sometimes substantially) on old customers and tightened their terms for new customers. Considering that service fees accounted for $19.1 billion of industry revenue in 2008, one wonders what future cost-cutting and fee-raising measures are in store for cardholders.
