Saturday, April 21, 2012

Capital One Buys Orchard Bank and HSBC Credit Cards - Orchard Bank Future In Doubt

In recent news Capital One Bank purchased the Orchard Bank Credit Card and all of the US credit cards issued by HSBC bank. The details and exact amounts of this purchase are currently unclear but we are confident that Capital One paid a hefty price.

Orchard bank has a trusted leader and brand in the bad credit credit card market for years. Additionally they have a huge customer base and many current card holders. It is arguably one of the biggest sub prime lending acquisitions.

We believe the acquisition of the Orchard Bank Credit Card is a subsequent result of the mortgage collapse and banking crisis in our country. Just like many local banks were forced to merge with larger banks and thus consolidated our choices of banks to use, we believe the credit card industry is going through the same process.

It is rumored that Capital One is actually going to shut down the Orchard Bank Credit Card. We believe that Capital One has made an aggressive attempt to target individuals with a less-than-perfect credit rating by rolling out a prepaid credit card, secured credit card, and an unsecured credit card for fair credit. This way we think Capital One intends to shrink the market and their brand will fill the void.

One of the most unique features about the Orchard Bank Credit Card was its application process. When you provided your information and your application was processed Orchard Bank would return to you and offer you all the credit cards that you qualified for which included: an unsecured MasterCard, a secured MasterCard, prepaid MasterCard… And then you would choose which credit card was right for your needs.

It certainly appears that Capital One could provide this option to applicants, we hope they do because we have heard many consumers say they appreciate this upfront process. Another concern we have is what alternatives will be left for consumers as the orchard bank secured credit card was one of the most competitive price and best secured credit card offers on the market.

It would report to all three major credit bureaus, charged you a 9.9% APR, and an annual fee of . This compared to unsecured credit cards before the mortgage collapse was a very low priced credit card that would still give you an opportunity to build positive credit. However today we have seen some partially secured credit card offers that we would not recommend to our worst enemies!

These partially secured credit cards require an upfront deposit, the most popular offer we have seen charges an outrageous 36% APR, roughly in upfront fees, and then another in annual fees. Thus, it will be interesting to see what comes of Capital One purchasing the HSBC Orchard Bank Credit Card and if there will continue to be competitively priced secured bad credit card offers available.

As of today and according to both websites it doesn't appear that Orchard Bank or HSBC Credit Cards will continue to be offered. With that said we are by no means executives with Capital One and have no way of knowing for sure, one way or another. Currently at the Orchard Bank website you can still apply for a credit card but from insider information, we have heard Orchard bank is going to stop accepting applications around the end of May.

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