It also describes the credit card business, and it explains why American Express has been coining money.
Banks keep debit fees higher than necessary in order to protect their much more lucrative credit card business.
It pursued the credit card business in a way that no other bank was doing at the time.
There are also conditions that can both hamper and help the future growth of the credit card business.
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She said the company's market share in the U.S. credit card business has barely changed over the last few years.
The company reported higher delinquencies for its U.S. credit card business in September to 3.65% from 3.43% making it 2 months in a row of worsening credit.
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Discover Financial is quite reliant on its credit card business.
No official news to report, but rumors are percolating that Target may be looking to divest its credit card business or that it might enact a share buyback.
Last week we noted a pickup in call-side activity in retail giant Target on rumors that the discount chain might be looking to divest its credit card business.
Fierce competition in the credit card business and a wave of huge mergers concentrated the industry in the hands of a few major players: Citigroup, JPMorgan Chase, Bank of America, Capital One Financial and American Express.
In my view, the ruling essentially brings a heavier dose of the free market to the credit card business in that it will let merchants offer discounts and special deals to customers depending on which piece of plastic they use to pay for things.
This has been a source of pain for credit card payment companies as well as banks as the credit card business represents a sizable part of their business models and the mobile payment systems were often advertised as significantly cheaper alternatives to the card payment systems.
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The total service fees that Bank of America earns from its debit and credit card business was relatively stable prior to 2009 aided by high interchange fees and card fees in the US relative to the rest of the world, which helped generate strong revenues for the card industry.
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For example, carefully record what you spend, along with the date, who was paid and the purpose for the purchase, and you can get breaks on business cards, online ads, business insurance, interest paid on your business credit card or business loans and even rent or dues on a workspace.
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The truth is that the bank's bosses worry that the untried debit card might cannibalise some of its highly profitable credit-card business.
Returns on the Dean Witter end of the business are poor, and Mr Purcell said recently that the credit-card business would be spun off.
The heftier equity base has also helped it acquire Chase Manhattan's credit-card business in Singapore.
By late last year it was clear that Bank One's credit-card business had deteriorated.
The credit-card business has been an important revenue generator for Sears, representing about three-fifths of the group's operating income.
The bank is exploring a sell-off of its branches and credit-card business in America, to refocus on corporate banking there.
Banks like the credit-card business because the juicy interest rates on card balances, combined with their own cheap deposits, produce fat profits.
He said that he foresees continued strong results as the bank builds more branches it currently has 50 and develops its newly opened credit-card business.
Visa, which declined to comment, is no longer in the debt-collection credit-card business, according to lawyers for debtors who have gotten card offers.
And this at a time when the credit-card business was already becoming more competitive, with new entrants offering rates as low as 5%.
The credit-card business also offers access to a wider customer base.
By placing its credit-card business and systems firm under the holding company, Mizuho would get handy income to help fill holes made by its banking operations.
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Outsourcing services, whether a bank outsources its credit-card business or a hotel its reservations, is harder to manage than outsourcing the manufacture of chips or tyres.
Barclays, for instance, has good figures on fraud in its credit-card business, but until recently it kept no records on how many times its dealers have breached trading controls.
As the credit boom reached its peak, the firm's credit-card business was growing by a dizzying 20% or more a year, with younger consumers with scant track records among the targets.
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