Barclaycard Seen as the Most Powerful Company

A recent survey was completed by Issuer Brand Index.  They monitor credit card companies and consumers to find out what cards are being obtained and possibly which the best are.  In a recent study Barclaycard was considered the most powerful credit card company on the market, for several reasons.  The study looks at the ownership, usage, and brand quality.  They also look at brand awareness and general brand characteristics to determine what cards are the best.

The study included a look at 17 top UK credit cards.  Barclay has the best brands beating out Capital One.  Barclay tends to have the best brand awareness as well.  Barclay tends to make the best pairings with brands on their cards.  They will take MasterCard or Visa and then pair it with something else that a consumer might want.  For example, Barclay has paired with several airlines to offer flight mile benefits to their consumers.  Barclay also has some of the widest range in card ownership not just in the UK, but around the world.  They are seen as one of the top banks.

The study has also shown that Lloyd’s TSB has the highest outstanding balances on their cards with more card purchases in a one year than any other brand.  Marks and Spencer’s card brand is in the top spot for high quality and general brand characteristics, but has low usage and moderate awareness.

This year Egg has had a tough road.  They are number 3 for branded cards, but they are also lit with controversy.  MBNA is second to Barclay in card ownership and usage.

According to one analyst, Matt Simester, having a powerful card on the market is the best thing for any credit card business.  The credit crunch has seen a lot of issues recently for the consumer.  They have poor credit history and are struggling to pay down their debts.  A consumer will find it hard to move from card to card, which puts pressure on the credit card companies like Barclay to maintain a higher standard.

Credit card companies are being pressured to lower their interest rates, lower costs of servicing consumers, and offer lower investments in the branding in order to make it through the credit crunch.

Barclay card was the only one in the study to find success in the pertinent areas.  They have more retailers and merchants issuing their cards and offer more rewards for the consumer.  There are a few catches to the Barclay card, such as the payment method.  The interest earned in a month is the first to be paid off.  Then the card will pay off the lower interest rate balance first.  In other words if there is a balance transfer deal of zero percent interest, the rest of the payment made will go to that balance rather than purchases at an interest rate of 14.9 percent.  Barclay card also reserves the right on any of their cards to increase the interest rate based on risk.

Back To Credit Card Updates July 2008