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Capital One Encourages Online Applications in Direct Mail for Student MasterCards

By Jim Bruene on December 1, 2009 6:57 PM | Comments (1)

imageMy son is almost half way through his second year of college, so we figured it was time he had a credit card. He's proved incredibly responsible with money, even avoiding dreaded debit card overdrafts so far. It's a good time for him to start building his credit history. And because he flies cross-country to school, I feel better knowing he has an emergency line of credit in his wallet.

Unfortunately, his student checking account provider, Chevy Chase Bank, hadn't offered him a preapproved MasterCard/Visa, so I've been watching his mail at home. It will come as no surprise that preapproved mailers to college underclassmen have been scarce. This summer he was courted by Discover Card and a higher-fee MasterCard (or Visa?).  But I was hoping for a preapproved fee-free MasterCard/Visa for maximum utility. 

This fall, Capital One (note 1) began to send my son MasterCard offers via snail mail. Right before Thanksgiving, the fourth or fifth piece in the series landed in our mailbox. He looked at it over the holidays and applied online for the card on Sunday. The fee-free card is no bargain for revolvers at 22.9%, but that's to be expected in this economic and regulatory environment.

The mailer offered the option of applying by telephone, mail or online. But the latter was clearly encouraged with a red badge, a 60-second response time, and a personalized URL with my son's name (e.g., John.Smith.getmycard.com).

Online application: The application process was a breeze. It was straightforward and fast and took less than five minutes, start to finish. The utilitarian online application design (screenshot 2) was easy to navigate and included ample embedded help, but no 800 number or online chat. The only unusual feature was the ability for users to select from about 16 different card designs. 

Because he was applying from a direct mail piece that included full Reg. Z disclosures, they were not repeated in the online app.

In total, it took about 4.5 minutes to complete the app process, and approval was granted in less than 10 seconds. My only complaint, a 22-digit offer and access code combination. Here's the exact timing:

  • 30 seconds -- Type personalized URL and load website
  • 30 seconds -- Type 16 digit reservation number and 6-digit access code
  • 3 mins and 30 secs -- Complete application form
  • 10 seconds -- Wait for credit decision

Onboarding: The initial onboarding process was almost nonexistent. Cap One didn't even send a congratulatory email on what is a major milestone of someone's banking life: their first credit card. All he received was the tiny "Congratulations! You're approved" screen at the end of the online approval process (see screenshot 3 below) along with instructions that his card would arrive in 7 to 10 business days. And there's no way to access the account until the card arrives.  

Grade: Capital One gets an A for account-acquisition marketing and online app mechanics, but earns a B- for first impression, and an incomplete for onboarding so far.

1. Capital One personalized application screen (29 Nov 2009, 8 PM Pacific)
Note: To begin the process, the applicant enters a 16-digit reservation number and 6-digit code found on the snail-mail piece.


2. Online application


3. Congratulations screen


1. I didn't realize until today that Chevy Chase is now owned by Capital One, which could be why my son has been receiving Capital One credit card offers. However, there has never been any mention of Chevy Chase or his checking account in the mailers. And one of the application questions was: "Do you have a checking account?"
2. For more info on how to create a winning online application, see our Online Banking Report: Online Account Opening published in June 2009.  

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Frequent reader but never comment, this post struck a chord with me tonight. My trouble is why you would wait for a pre-approved offer versus applying for a lower rate card for your son? Many institutions offer a lower rate than 22.9%. In the Chevy Chase market area, where I work, we offer a Low, fixed 13.49% APR for students. I would hate for him not to know that there are better practices out there and you don't have to settle for a high rate. On the flip side it would take longer than 4.5 minutes, but as the first card is crucial to your future credit report, it may be worth the extra time for a lifetime of a lower rate.

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