1. Our testing shows that some of our original assumptions (above) were correct, but some were not. Offering a metal card does increase the number of customers we attract. We attract on average 65k customers a year on the metal card, compared to 60k when we only had plastic cards. Testing also showed that the average annual spend for the metal card group is $250,000.

In order to offset the cost of the metal card, you have decided to introduce an annual fee. The fee will be $10 per year per customer. You have also found that because metal cards encourage customers to spend more, customers also lose/damage the cards more often. This increases the lifetime cost of the card to $125 per customer .

Previous questions considered year 1 profitability, but in reality, people keep their credit card for multiple years. For the customers gained in year one (65k on metal cards vs 60k on plastic cards), how long would it take for the metal card strategy to be more profitable than the plastic card strategy?

2. Based on your findings, do you recommend that Capital One roll out the metal card strategy? Why or why not?

Plastic Card vs Metal Card Original Assumptions