Posted on 12/30/2005 6:21:49 AM PST by Flavius
Bank of America to Complete $35 Billion Acquisition of MBNA Corp. on Sunday
RALEIGH, N.C. (AP) -- It'll happen on a quiet Sunday morning, the first day of the new year -- definitely not banker's hours. But that might just be the perfect time for Bank of America Corp. to complete its $35 billion acquisition of MBNA Corp., because there won't be much -- if anything at all -- for consumers to notice once the deal is done.
ADVERTISEMENT When the paperwork is complete, the nation's second-largest bank will have 40 million active credit card accounts on its ledger, making it one of the leading worldwide payments-services companies and issuers of credit, debit and prepaid cards based on total purchase volume.
If there are changes coming to credit card fees and rates, or even a different look to the cards themselves, the bank isn't saying.
"No decisions have been made," Bank of America spokeswoman Alex Liftman said.
But Dick Bove, an analyst with Punk Ziegel & Co. in St. Petersburg, Fla., doubted most consumers will see much change in the months ahead, predicting that Bank of America will move its existing credit card system into that of MBNA's. Bank of America's new card services unit will be led by Bruce Hammonds, currently MBNA's chairman and chief executive.
"I don't think that MBNA is going to change its major programs ... and those programs are far better than the Bank of America programs," Bove said.
MBNA is the leader in so-called affinity marketing, with established branding relationships with more than 5,000 organizations and financial institutions, from the National Football League to hundreds of medical organizations.
Bank of America has said its customers will benefit from access to a larger suite of credit card products after the deal, while giving MBNA customers access to banking, mortgage and investment products offered by Bank of America.
For now, Liftman said, executives from both companies are continuing to review each company's business practices and working to integrate the two companies. As part of the acquisition, Bank of America plans to eliminate 6,000 jobs across both companies, which the Charlotte-based bank has said will help it achieve overall cost savings of $850 million by 2007.
Wilmington, Del.-based MBNA has about 10,500 employees in its home state and 28,000 overall. Bank of America has more than 177,000 employees, and operates two credit card call centers in Delaware that employ about 1,300 workers.
Bove predicted the bulk of the job cuts will be among Bank of America employees as the company closes down its existing credit card processing operations in favor of MBNA facilities. He expects job losses will come within the next four to six weeks.
Under terms of the agreement announced June 30, MBNA shareholders will receive 0.5009 common shares of Bank of America plus $4.125 in cash for each of their shares.
BoA
setting the standard in customer service....
(SATIRE)
Frightening to think what can happen when you combine the customer service of BoA with the arrogance of MBNA.
MBNA is an organized criminal enterprise, and BofA is hardly any cleaner. This is one marriage that was clearly not made in heaven...
MBNA was spunoff from Maryland National Bank in order to rescue that bank from insolvency. Al Lerner was able to purchase the Cleveland Browns with the profits he made from MBNA.
The old Maryland National Bank was absorbed by MNC Bank which was then run by Hugh McColl who coveted the name Bank of America. BofA wouldn't budge so he renamed MNC Bank, NationsBank. Eventually BofA was absorbed by NationsBank
Mind telling me why you think that? I was deeply in credit card debt when I graduated from college, and no company was more helpful than MBNA when it came to entering a debt consolidation program. They reduced my interest rate to 1% (on 15k in credit card debt, we're talking serious dollars) and enabled me to really make a dent in my obligations. Above all, they were more helpful than any other credit card company I dealt with, so I'm very interested to know why you regard them as criminal.
This should never happen. Keep in mind that Bank America dumped big money into the Gore court challenge in Florida.
Congress should look into this particular merger.
Vertical consolidation in the banking industry, it's the new wave. Capital One just did the same thing in reverse and on a smaller scale...they bought Hibernia, which is the biggest bank in Louisiana and growing rapidly in Texas. Unfortunately, they were just about ready to close the deal when Katrina and Rita hit. They got a bit of a discount on Hibernia after that.
}:-)4
Well, I hate to say this, but with the current makeup of Congress, you're unlikely to see such action.
The second one was when they called me on the phone because one of my neighbors was delinquent in paying their credit card bill and tried to pump me with questions about them, while effectively trashing them as deadbeats.
It is an ugly company that has a pattern of using ugly, criminal tactics to reap their profits, and now that they are merging with BofA I will have to take my business away from BofA.
Thanks for the information. I need to look for a new credit card company now. Does anyone have a good credit card company in mind? (I have kept my record clean by keeping my bills paid off each month.)
A lot of the discussion there revolves around finding and comparing deals with good balance transfer offers, rewards points, possibilities for interest rate arbitrage, building up a credit history, how to apply for and get a relatively large number of credit cards in a short period of time, financing entrepreneurial activities by credit card, and similar strategies, so if you are interested in more conventional ways to use a credit card it might not be exactly what you are looking for, but if you don't mind sifting through a lot of information, you can probably find what you need.
"how to apply for and get a relatively large number of credit cards in a short period of time"
Why would anyone want more than one credit card?
I have an MBNA CC and it has been a good company and I haven't charged more than $7,500 in any gi given month and couldn't fatham how I could ever approach the card limit and wouldn't bother with having to pay more than one under any conditions.
You need to pay for business expenses, for which you will later be reimbursed. Put them on a separate card in order to track them more easily. As a bonus, put them on a "rewards" card and earn points or cash back from business expenses with no out-of-your-own-pocket outlay.
Many cards offer tempting "goodies" to entice people to become new cardholders. Many people will sign up for a new card to take advantage of the incentive, and once the incentive is used up or expires, cut up the plastic and no longer charge anything to that card.
Your FICO score depends on many variables, including the average number of years that your accounts have been open, and the gross percentage utilization of your open lines of credit, to name a few. So, with proper planning, by getting several new credit cards, you can "game" the system. For example, for people who have a large outstanding credit card balance, by increasing your total credit limit, and redistributing any outstanding balance that you owe among several cards (via 0% no-fee balance transfers), you can ensure that no single card is utilized to more than 50% of its total credit limit, and your total credit used vs. the total available credit limit of all cards can be gotten down to a small percentage, both of which will improve your FICO score. Of course, if you overdo it, you can negatively influence your FICO score by having too many open accounts.
You can borrow appreciable sums, perhaps tens of thousands of dollars or more, for literally 0% interest, to finance a business start-up, to get through a temporary cash-flow problem, to invest it in an insured savings account to earn 4% per annum interest, (or even to engage in extremely risky pursuits such as speculating in the markets or gambling using the proceeds of those credit card loans) etc.
Needless to say, to pursue any of those strategies successfully, you need to thoroughly understand what you are doing and the risks that you are taking, and have the discipline to follow through with all of the "gotchas" that credit card companies like to hide in their fine print. Done correctly, it can provide decent benefits. If you do it incorrectly, you can drown in debt and damage your life or your family's lives.
If you are the type of person who derives satisfaction from paying off their credit card balance in full every month, or have difficulty sleeping when you have large amounts of debt, or have financial obligations that require you to act conservatively and prudently, clearly some of those strategies are not for you...
Yup. Nothing like perpetually rolling over a student loan at low promo rates from one card to another. Especially in light of what's currently going on with rates
I had an MBNA World points card...now with Bank Of America......TERRIBLE. MBNA offered superior customer service vs. (BOA) which has the most under-educated people I've ever had to deal with.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.