Most HSBC Credit Cards Become Capital One Credit Cards

Capital One HSBC Credit CardsOn May 1, 2012, Capital One completed its acquisition of the majority of HSBC’s United States credit card business for a reported $2.6 billion, adding definitiveness to a sale that caused a stir among consumers following its tentative announcement in August 2011.

The deal was originally announced less than two months after Capital One, currently the ninth largest bank in the United States by total assets, bought ING’s American online banking division, ING Direct USA, for $8.9 billion. This transaction itself drew consumer criticism over concerns that fees would rise and customer service would worsen under new ownership, and the HSBC sale only served to fan these fires with worries that Capital One was another “too big to fail” banking institution in the making.

Nevertheless, the sale went through, with Capital One giving HSBC $31.3 billion in cash to cover the outstanding balances of the credit card accounts it is shipping Capital One’s way in addition to the aforementioned $2.6 billion sale premium. Capital One plans to pay with cash freed up via balance sheet repositioning related to the ING Direct sale.

With this move, Capital One, which already garners more than half of its revenue from its credit card division, is free to grow unencumbered by a stagnate U.S. lending market. HSBC, the world’s fifth largest bank, can in turn concentrate on markets trending more upward, including U.K. consumer banking.

Interestingly, HSBC is neither selling Capital One the totality of its U.S. credit card business, nor ceasing to issue credit cards in the United States. Prior to the sale, HSBC issued credit cards in the US through two distinct subsidiary companies: HSBC Finance Corp. and HSBC USA. Capital One purchased HSBC Finance Corp., which includes the popular brand names Orchard Bank and Household Bank as well as HSBC’s suite of co-branded cards, such as the Best Buy Credit Card and the GM credit card. HSBC USA will continue to offer some credit cards, though it too has been depleted, with HSBC having shipped nearly one-third of the HSBC USA credit card operations as well as its bank branches in upstate New York to First Niagara Financial Group, Inc.

“When First Niagara completes its acquisition of the HSBC branches, the regional bank will have an enhanced leadership position in the Northeast, with nearly 430 locations, $30 billion in total deposits, $38 billion in assets and more than 6,000 employees serving consumers, businesses and communities across New York, Pennsylvania, Connecticut and Massachusetts,” according to a First Niagara press release. “The transaction will also provide First Niagara with number-one retail market share across Upstate New York, virtually doubling its number of branches in New York State to more than 200, stretching from Buffalo to Albany and down through the Hudson Valley.”

Most consumers, however, will be less concerned with the details of these acquisitions than what they mean for their favorite credit cards, like the Orchard Bank Secured MasterCard – one of the most affordable secured cards on the market given its low 7.99% APR and lack of an annual fee during the first year.

While Capital One is one of the only major card issuers to cater to people of all credit levels, with an acquisition typically comes a number of changes, and fee increases for the Orchard Bank Secured Card in particular would leave a substantial void in the market and make already tough times that much tougher for inexperienced consumers and those whose credit was damaged during the financial downturn.

Of course, Capital One has not yet announced specific plans for HSBC’s current offerings, and only time will tell how things play out, but we can expect consumers with damaged or no credit to flock to this card while the current offer still stands.

Needless to say, we’re in for some significant changes following this major acquisition, and the next few months should prove quite interesting.

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POST YOUR COMMENT
Feb 9, 2014
Photo of Arveen R.
By: Arveen Randhawa
Too complicated.
Jul 19, 2013
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By: Mackenzie G. Petrilla
Can't log into capital ones site. When I log into have says to click on capital one to set up account. won't let me log in or show me what to do.
Jul 19, 2013
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Card Hub
Your best bet is to call Capital One's Credit Card Customer Service: 1-800-955-7070.
Jul 17, 2013
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By: Lisa Perkins
Website is awful! Very difficult to make a payment!!!!!
Apr 25, 2013
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By: Jeffrey P Hoar
Ok will People that owe Capitol one from years ago that now have orchard bank card accounts be shut down or how does that work
Apr 25, 2013
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Card Hub
Hi Jeffrey, you're having a problem with an Orchard Bank card right now?
Mar 26, 2013
Photo of Joy O.
By: Joy Olsen
Having a very Hard time getting online I go to Capital One Card Services they don't know who I am. so is there any way of going back to GM card wherever so I can pay online? So to tell you the truth this is the "PITS".......
Mar 26, 2013
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Card Hub
Hi Joy, if you still have an HSBC credit card, then you should get in touch with their customer service at 1-888-385-8916.
Feb 7, 2013
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By: Jeremy Solano
I have cards from both company's I like them both I'm happy that capital 1 is taking over my card it makes it nice that I can now pay both my cards in one place
Nov 6, 2012
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By: Howard Shore
I AM SO ANGRY.

I WANT THE CAPITAL ONE CREDIT CARD SO I CAN GET MY DELTA SKYMILES AND I HAVE POINTS WITH MY HSBC CREDIT CARD, BUT SO FAR THEY CAN NOT BE CONVERTED TO DELTA SKYMILES WITH CAPITAL ONE,

I WISH THIS WOULD HAPPEN.

HOWARD PAUL SHORE.
HSBC CUSTOMER
Nov 14, 2012
Photo of Card H.
Card Hub
Can you tell us a bit more about your situation? Which card did you have before and how many miles had you accrued?
Nov 14, 2012
Photo of Howard S.
Howard Shore
OMG i forgot i posted a comment like that. well, i still have the HSBC Premiere mastercard and they do NOT give you miles, but POINTS and their program sucks! it is MORE expensive to buy airplane tickets and i have GOOD CREDIT and wish something can be done about it. hsbc even got bought out by capital one who offers a much better credit card that works with the delta skymiles program and gives you skymiles, but you have to be a resident of canada and i am also a Canadian with a Canadian address which i go to visit all the time, so i am unsure if i more
Oct 30, 2012
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By: Jan Duncan Stenberg
I'm glad to not have to deal with HSBC any longer. A wait and see on how things evolve.
Sep 10, 2012
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By: Charles Parr
Hey Captial one, thanks for making it VERTUALLY IMPOSSIBLE for me to make a payment! The site I used to use is ALWAYS down, and every time you call me to collect because I CANT make an online payment the jack A$$ on the other line says to use the exact website printed on the back of the card........ You guessed it, that's the one that has not worked ever sense they bought HSBC. HIRE A TECH GUY TO PUT A LINK ON THE WRONG/OLD SITE TO THE "NEW ONE" that your reps talk about yet keep so secretly hidden!
Jun 14, 2012
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By: Teri Hill Ostrelich
I have received on average 5-10 phone calls from Capital One daily regarding my Orchard Bank card. The card is being paid via auto pay and when Captial One checked they said everything was fine and they didn't know why they were calling. This scenerio has been played over and over again each day. Maybe Capital One would like to hire some USA citizens to help get their company's act together.
Apr 8, 2013
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Krystina McMorrow
The most rediculous situation I have experienced in awhile. I have both cards and I never know who is emailing me or who to pay at which website. CRAZY!!! Why not leave them both alone until you figure out what the ****** you are doing!!!!!

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