For Credit Consumers, Focus on Fed Rather than Mergers

By Andrea Coombes, MarketWatch

Consumers with MBNA cards in their wallets are likely eyeing Bank of America’s acquisition of the card issuer with alarm, but they should probably be more worried about the quieter machinations over at the Federal Reserve.

With Bank of America’s $35 billion purchase of MBNA, the bank will double its customer accounts to 40 million and hold $143 billion in outstanding balances.

But MBNA and Bank of America customers will likely see few changes, and any changes that do occur won’t happen for months, industry watchers said.

“All of this ends up having a very minor impact from a consumer standpoint,” said Craig Woker, an analyst at Morningstar who covers Bank of America.

Others agreed. “This is more of a play for Bank of America to get a higher level of scale in the card business and to improve the economics of their card business,” said Ron Shevlin, principal analyst with the financial services team at Forrester Research.

“We don’t believe there will be a huge impact in the product approach, rewards program, things like that,” Shevlin said. “We don’t think that BofA is going to mess around too much with the product strategy at MBNA.”

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