You're Wrong to Think Bank of America Corp Is Dead Last

For banks, relationships with wealthy individuals are by far the most profitable. This is the result of more spending on the cards, annuals fees charged to customers, and lower likelihood of default. Unfortunately for Bank of America's (NYSE: BAC  )  credit card business, the outlook appears awfully gloomy:


Source: JPMorgan Chase Investor Relations. 

Based on this chart alone, it's easy to come to the conclusion that Bank of America has some serious ground to gain in courting wealthy customers. 

Trading places
That's not the entire story, however.

When moving beyond which credit card wealthy customers would simply consider to which they actually use as their primary credit card, it turns out the picture looks much different for Bank of America:


Source: JPMorgan Chase Investor Relations.

While Bank of America still trails JPMorgan Chase and American Express, it's penetration into the wealthy customer market looks much more acceptable. So while Bank of America's credit card might not be one that's often considered by wealthy customers, the facts on its actual use don't lie.

Things may be looking up for Bank of America.

The reason for optimism
With that in mind, there are two key takeaways.

First, and most obvious, when it comes to actual use, Bank of America is in a much better place than what one may initially think.

Bank of America notes a customer moving from a checking account to having the bank as their primary account results in revenue per customer ballooning from $340 to $600. So its ability to ensure its wealthiest customers consider the cards it offers as their primary one is encouraging from a top-line perspective.

Second, with 72% of wealthy individuals not considering a card relationship with Bank of America, it shows there's still a lot of room for growth. With such a strong level of use compared with to a weak level of future consideration, this suggests some sort of disconnect between the company's effectiveness at gaining new wealthy customers versus retaining existing ones.

With the amount of credit cards issued rising by 22% year over year to 3.9 million cards in 2013, a continuation of this high level growth can lead to big results to the top and bottom lines, as 12.5% of the company's non-interest revenue comes from this source.

It's encouraging to know Bank of America is able to ensure those who have a credit card consider it as the credit card in their wallets. With continued growth and an increased focus on new customers, that number should only continue to rise.

Your credit card may soon be completely worthless
While the credit card industry at Bank of America and the other biggest banks is booming, the reality is the plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


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  • Report this Comment On May 15, 2014, at 10:19 AM, funfundvierzig wrote:

    The shares of this intractably corrupt bank have lost 75% of their value since touching an all-time high of 54.90 a little more than seven years ago on Nov. 16, 2006,

    Bank of America is not only "Dead Last", but the "Lasting Dead".

    ...funfun..

  • Report this Comment On May 15, 2014, at 8:01 PM, Rifleman3006 wrote:

    Funfun lost his teller job at the big bad bank - LOL.

  • Report this Comment On May 15, 2014, at 10:40 PM, funfundvierzig wrote:

    Folks, you know things are rotten at this bank when the unethical trash shilling for Bank of America Management have to harass and heckle outside individual investors with differing viewpoints.

    ...funfun..

  • Report this Comment On May 16, 2014, at 6:12 PM, mikewatson021 wrote:

    Bank of America issued more than a million new credit cards during the quarter. http://goo.gl/gsUpEb

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7/24/2014 2:11 PM
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