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Capital One Discontinues Orchard Bank Credit Cards

If you haven't heard yet, Capital One announced that it closed on the purchase of HSBC's U.S. credit-card business earlier this month. Capital One paid a little over $31 billion in cash and received just over $28 billion in credit card receivables following the acquisition. It really was a win for HSBC as they desperately wanted out of the volatile credit card business in the U.S., and it also happened to be a perfect strategic fit for Capital One who continues to aggressively grow its domestic credit card portfolio.

Part of the deal included HSBC's well-known Orchard Bank credit cards too, which have consistently ranked for years among the best credit cards for people with bad credit. If you have great credit scores, you've probably never even heard of this card. However, you would be hard-pressed to find anyone with bad credit who hasn't at least considered an application for an Orchard Bank credit card at some point in time.

Compared to many other competitors in the subprime space, the Orchard Bank card has stood out among the rest with its lower fees and interest rates. Therefore, it's been a favorite of many consumers with less-than-perfect credit who used the card as a tool to build positive payment history and improve their FICO scores when other credit options were limited. If you're an existing Orchard Bank cardholder, don't freak out because of this article's title. Relax. Your card isn't going anywhere at the moment, and you should've already received information about the conversion of your account over to Capital One. But here's the real big news taking place this week.

As of tomorrow, Capital One will no longer be accepting new applicants for any of the Orchard Bank credit cards. Orchard Bank, the brand, is getting the axe once and for all! Will Capital one launch a new bad credit credit card to take its place? We don't really know at this point, but what's clear is that Capital One is certainly comfortable issuing cards in the subprime space. In fact, the Capital One Secured MasterCard remains one of the most popular credit cards for bad credit in the marketplace.

What'll be interesting to see is if Capital One launches a new "unsecured" credit card for bad credit to fill the void. What do you think? Will they stick with the Capital One Secured MasterCard, or do you think we'll eventually see an unsecured option for bad credit from Capital One as well?

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Joshua Heckathorn's picture

Joshua Heckathorn is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past twenty years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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Mary Strenge's picture

I am waiting for a credit back on my Orchard/Visa card from the date of 5-28 - Very frustrated with the service so far.

Joshua Heckathorn's picture

@Mary, what kind of credit are you waiting on? Is this for a returned purchase or something?

kathy yarbrough's picture

I have had orchard bank credit card for over a year and a half and I really really like it. I do wish that they would discontinue the annual fee is 59 dollars especially after you've had this card for a while. I am sure that I will do a balance transfer if they don't change that

Joshua Heckathorn's picture

Thanks for your comment Kathy. Unfortunately, I wouldn't count on Capital One ever discontinuing the annual fee for a subprime card. It's just not going to happen.

Also, you really shouldn't be carrying any balance on an Orchard Card. The interest rates are very high, so make sure you're only purchasing what you can afford to pay off in full each and every month.

barbara's picture

After Capital One got my Orchard account, which wasn't at the limit, Cap One sent it to an collection agency. I've been trying since June to make payments but they don't want my money!