Capital One
Capital One Financial Corporation is an American bank holding company founded on July 21, 1994, and specializing in credit cards, auto loans, banking, and savings accounts, headquartered in Tysons, Virginia, with operations primarily in the United States. It is the sixth-largest bank in the United States by total assets as of 2025, the third-largest issuer of Visa and Mastercard credit cards, and one of the largest car finance companies in the United States.
The bank has approximately 750 branches, including 30 café style locations, and 7,000 ATMs across the United States with no ATM usage fee. It is ranked 82nd on the Fortune 500, 15th on Fortune
The company's three divisions are credit cards, consumer banking and commercial banking., the company had loans receivable of $114 billion from credit cards, $75 billion from auto loans, and $85 billion from commercial loans. The company has been fined by regulators for its role in money-laundering on separate occasions and been subject to consumer class action lawsuits and government investigations in relations to its treatment of customers.
History
Monoline credit card company (1994–2004)
and Nigel Morris developed the idea of using information technology and statistical analysis to create customized credit card offers for different segments of customers in 1987. At the time, most credit cards would offer the same terms—interest rate and annual fee—to almost everyone, regardless of the financial risks of each customer. However, Fairbank and Morris' idea was to drop the fee and target various credit card terms to specific customers. They consulted with Oracle Corporation on how to compile the demographics and other statistics that would help them sort out and identify those customer market segments. Funding Universe wrote: “Fairbank and Morris’s plan would allow companies to fine-tune card product and pricing strategies for individual customers through a decision-making structure blending together marketing, credit, risk, operations and technology functions."They then started soliciting banks regarding using their approach, indicating that they anticipated large profits based on the large numbers of customers they projected to enroll. They convinced Richmond, Virginia-based Signet Bank to start a credit card division called Signet Financial in 1988 that would utilize their approach. As part of the deal, they became employees of Signet. In 1991, Fairbank and Morris had a great success with a mass mailing that offered to transfer existing credit card balances from other banks' credit cards for the opportunity of a lower interest rate with Signet.
On July 21, 1994, Signet Financial Corp announced the corporate spin-off of Signet Financial, at first naming it OakStone Financial with Fairbank as CEO and Morris as COO. After the initial public offering, the new company was renamed Capital One in October 1994 and the spin-off was completed in February 1995.
At that time, Capital One was a monoline bank, meaning that all of its revenue came from a single product, in this case, credit cards. This strategy is risky in that it can lead to losses during bad times. Capital One attributed its relative success as a monoline to its use of data collection to build demographic profiles, allowing it to target personalized offers of credit directly to consumers.
Expansion into auto loans (1996–present)
In 1996, Capital One moved from relying on teaser rates to generate new clients to adopting more innovative techniques that would attract more customers to their business model. At the time, it was losing customers to competitors who offered higher ceilings on loan balances and no-annual-fee accounts. The company came up with co-branded, secured, and joint account credit cards. In mid-1996, Capital One received approval from the federal government to set up Capital One FSB. This meant that the company could now retain and lend out deposits on secured cards and even issue automobile installment loans.In 1996, Capital One expanded its business operations to the United Kingdom and Canada. This gave the company access to a large international market for its credit cards. An article appearing in Chief Executive in 1997 noted that the company held $12.6 billion in credit card receivables and served more than nine million customers. The company was listed in the Standard & Poor's 500, and its stock price hit the $100 mark for the first time in 1998.
In July 1998, Capital One acquired auto financing company Summit Acceptance Corporation.
In 1999, Capital One was looking to expand beyond credit cards. CEO Richard Fairbank announced moves to use Capital One's experience with collecting consumer data to offer loans, insurance, and phone service.
In October 2001, PeopleFirst Finance LLC was acquired by Capital One. The companies were combined and re-branded as Capital One Auto Finance Corporation in 2003.
In late 2002, Capital One and the United States Postal Service proposed a negotiated services agreement for bulk discounts in mailing services. The resulting three-year agreement was extended in 2006. In June 2008, however, Capital One filed a complaint with the USPS regarding the terms of the next agreement, citing the terms of the NSA of Capital One's competitor, Bank of America. Capital One subsequently withdrew its complaint to the Postal Regulatory Commission following a settlement with the USPS.
Automobile loan financer Onyx Acceptance Corporation was acquired by Capital One in January 2005.
Expansion into retail banking (2005–present)
In 2005 Capital One became the first monoline credit card issuer to buy a bank, as it entered into retail banking by acquiring Hibernia National Bank. It purchased the New Orleans, Louisiana-based Hibernia for $4.9 billion in cash and stock. It acquired Melville, New York-based North Fork Bank for $13.2 billion in cash and stock in 2006. The acquisition of retail banks greatly reduced its dependency on the credit-card business alone. It briefly considered acquiring Netspend, a marketer of prepaid debit cards, for $700 million in 2007, but the deal was not ultimately completed.In 2008, Capital One debuted their blue and red "swoosh" logo, and underwent a $13 billion marketing campaign in the following years. The similarity of Credit One Bank's logo and the Capital One logo caused confusion among consumers, with many not realizing they were separate companies. Credit One Bank adopted their black and blue "swoosh" logo in 2006.
In February 2009, Capital One acquired Chevy Chase Bank for $520 million in cash and stock.
In January 2011, Capital One acquired Canada-based Hudson's Bay Company's private credit card portfolio from Synchrony Financial, then known as GE Financial.
In April 2011, Capital One signed a deal with Kohl's to handle Kohl's private label credit card program that was previously serviced by Chase Bank for a seven-year period for an undisclosed amount. The contract between the two companies was extended in May 2014.
In August 2011, Capital One reached a deal with HSBC to acquire its U.S. credit card operations. Capital One paid $31.3 billion in exchange for $28.2 billion in loans and $600 million in other assets. The acquisition was completed in May 2012. The acquisition also included private issued credit cards for such companies as Saks Fifth Avenue, Neiman Marcus, and Lord & Taylor that were previously handled by HSBC.
In February 2012, along with several other banks, Capital One announced support for the Isis Mobile Wallet payment system. However, in September 2013, Capital One dropped support for the venture.
In 2012, Capital One closed 41 branch locations.
In 2014, Capital One amended its terms of use to allow it to "contact you in any manner we choose", including a "personal visit... at your home and at your place of employment". It also asserted its right to "modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose". The company stated that it would not actually make personal visits to customers except "As a last resort,... if it becomes necessary to repossess sports vehicle". Capital One also attributed its assertion of a right to "spoof" as necessary because "sometimes the number is 'displayed differently' by 'some local phone exchanges,' something that is 'beyond our control'".
In February 2014, Capital One became a 25 percent owner in ClearXchange, a Peer-to-peer transaction money transfer service designed to make electronic funds transfers to customers within the same bank and other financial institutions via mobile phone number or email address. ClearXchange was sold to Early Warning in 2016.
In October 2014, Capital One acquired Adaptive Path, a San Francisco-based user experience and digital design consultancy.
In January 2015, Capital One acquired Level Money, a budgeting app for consumers.
In 2015, Capital One closed several branch locations to leave 174 operating branches in the D.C. metro area.
In July 2015, the company acquired Monsoon, a design studio, development shop, marketing house and strategic consultancy.
In 2015, Capital One acquired General Electric's Healthcare Financial Services unit, which included $8.5 billion in loans made to businesses in the healthcare industry, for $9 billion.
In October 2016, Capital One acquired Paribus, a price tracking service, for an undisclosed amount.
In July 2019, Capital One signed a deal with Walmart to handle Walmart's private label and co-branded credit card programs that was previously serviced by Synchrony Financial. Walmart terminated the deal in April 2024 after customer service failures by Capital One.
In November 2021, the company introduced Venture X, a travel rewards credit card, with a $395 annual fee.