BARCLAYCARD are the kings of credit card takeovers.
In 2008 they bought millions of credit card accounts from Goldfish and in 2011 even more from Internet bank Egg.
In this article we look at how those huge takeovers affected ordinary credit cardholders and the possibility that Barclaycard will make it three in row by buying up MBNA's credit card portfolio in 2012.
Barclays is one of the world's biggest banking brands with about 48 million customers worldwide.
Barclaycard launched the UK's first ever credit card in 1966 and currently has 10.5 million personal credit card customers, excluding the Egg cardholders yet to be fully integrated into the business.
Currently, they hold a competitive position in the market, particularly for promotional balance transfers where they've been amongst the market leaders for the most part of 2011 and continue to be the only provider to stretch 0% as far as 24-months.
Additionally, they market some strong deals on new spending as well as credit building.
Little surprise, then, that the bank has the muscle to buy out the competition.
We first saw that muscle flex in February 2008 as Barclaycard took over Goldfish.
Goldfish was a bit of a troubled brand which had been owned by Centrica, Lloyds TSB, Morgan Stanley and, finally, Discover in its 11-year lifetime.
Despite frequent changes at the top, however, the Goldfish business still had 1.7m customers when Barclaycard bought it up for £35m.
Carping over rewards
For customers, though, Barclaycard's takeover was to prove the most disruptive change of hands yet.
Goldfish was one of the first credit card brands to garner customer loyalty by offering benefits including discounts on gas, phone and shopping bills.
It even linked up with the BBC to enable holders to pay for their TV licence by spending on the card.
From August 1st, however, 500,000 ex-Goldfish customers found that the value of their rewards had been cut in half.
Goldfish cardholders previously accrued one point for every £1 they spent with the card and exchanged every 1,750 points for a £10 shopping voucher.
Once Barclaycard's changes came into effect, though, the earning rate remained the same but it took 3,500 points to earn £10, allegedly as a result of the "increased costs" the provider had incurred from running a reward scheme.
Barclaycard had launched its own reward scheme, Barclaycard Freedom, to much fanfare a few months before the takeover and ex-Goldfish customers were entitled to earn through the scheme.
Given Freedom's meagre earning potential, however, few were satisfied with that substitution.
Egg were similarly troubled when its takeover was first rumoured in October 2010.
Despite its popularity with credit cardholders, among whom it had a reputation for common sense policies and decent service, the Egg brand had been making a loss over the past few years.
Egg credit cardholders have had access to some of the UK credit card industry's most innovative deals, from launching one of the best account aggregating sites, Egg Money Manger, to offering savings on consumer products with the Egg cash back store.
Although its owner - Citigroup - was one of the 'big four' American banks, Egg had been very much a British brand, distinctive as one of the UK's best known Internet banks.
Even so, however, Citigroup - bailed out with billions of government dollars just two years ago - could ill afford the loss-making arm of the business.
"Citigroup is looking for around £400m for the business," Mark Kleinman, city editor of Sky News said of the rumours.
"I understand Barclays is keen to buy Egg and merge it with its Barclaycard and mortgage operations in the UK."
Kleinman turned out to be very correct, although the deal to buy up 1.15 million Egg cardholders wasn't confirmed until March 2011.
Barclaycard's subsequent integration of the Egg accounts also showed that, from a consumer point of view, some lessons had been learnt when it came to rewards.
In September 2011, Barclaycard announced that Egg Money credit cardholders would keep their 1% cash back rate when they received their new Barclaycard credit cards.
Egg customers would keep other terms and conditions such as promotional interest rates, Barclaycard said.
In fact, any changes to terms were to the consumer's benefit. Egg previously had a £16 default charge, which with the Barclaycard integration will see it reduced to the market standard £12.
The particular cards that Egg customers will receive over the next few months will depend on their existing account.
Egg Visa cardholders will be sent a standard issue Barclaycard, while Egg Money cardholders will receive one of Barclaycard's newfangled World Mastercards.
Better than Citi
In addition, of course, Barclaycard were likely to be a vast improvement on Citi, under whose yoke Egg Money cardholders have seen their interest rates and fees increase and their credit limits squeezed.
In May 2008, for example, the provider hit the headlines after cancelling the accounts of 160,000 of its credit card holders, many of whom had good credit scores and regularly repaid their balances in full, on the flimsy excuse that it was "changing its acceptable customers profile".
In August of that same year Egg increased interest rates for its Money customers from 7.9% to 12.9% APR and added a new 3% fee for cash withdrawals, gambling transactions, and balance transfers.
The conversion fee for foreign currency transactions went up from 2.65% to 2.95%.
Like Egg, MBNA has an American parent - Bank of America - and, like Egg, that parent was forced to cut the apron strings.
The sale of the business was announced in early 2011 and by October the provider's leading deals had been taken off the market for new applicants.
However, the sale of the existing credit card accounts still hasn't been confirmed.
Barclaycard bought out 60,000 of MBNA's small business customers earlier on in the year, but Virgin Money are also a strong contender for the deal since MBNA manage the brand's current credit card range.
However, there is a real concern that Barclaycard could be getting a bit too big for its boots with this latest takeover.
Currently Barclaycard has approximately 20% of the personal credit card market. With MBNA on their books regulators might start to get nervy.
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