Credit Card Companies Targeting Offers More Closely
Credit Card Offers Clogging Up Mail Less
You’re probably very nearly as happy that credit card companies are sending you fewer offers as your long-suffering mail carrier is.
In the third quarter of 2009, credit card issuers sent out 391 million pieces of marketing direct mail. That averages out at about 30 million items of junk mail a week, which sounds quite a lot.
But no. In the same quarter of 2008, credit card companies sent out 1.3 billion mailshots. And that works out at a hundred million items a week.
Credit Card Deals Getting Worse…
That reduction is great news if you’re a tree that’s scheduled to be cut down to make paper pulp. But it’s not so good if you want to apply for a credit card.
The direct mail figures come from Mintel, a leading market research company.
And Andrew Davidson, who’s a senior vice president at Mintel Comperemedia, points out that there’s more to this story than just numbers. He says: “Credit card issuers are cautiously navigating Credit Card Accountability Responsibility and Disclosure (CARD) Act regulations. In addition to adjusting their direct marketing strategy by sending less mail, they’re raising rates and fees on existing and new cards. The credit card offers we see today are undeniably less attractive than they were one year or even six months ago.”
…Much Worse
Andrew Davidson’s team found that:
- Although prime rates remain static and low, variable purchase Annual Percentage Rates (APRs) in credit card mailings jumped by more than a full percentage point between the first and third quarters of this year
- This time last year, 27 percent of mailings offered fixed rate credit card deals. This last quarter, that figure was six percent.
- Introductory purchase APRs are being offered for briefer periods. Last year, half of mailings provided introductory periods of 13 months or longer. This year, just five percent did. And 21 percent gave less than six months.
Credit Still Available–If You Don’t Need It
These credit card trends don’t apply to everyone. If you’re rich, secure, and have a great credit score then you probably still receive credit card offers. In April through June of this year, Mintel says that card issuers sent out 28 percent more offers that they did in January through March. But only for premium credit cards, and only to those who presumably don’t need credit.
As Andrew Davidson says: “Credit card companies are competing to attract people with high credit scores and big spending habits. Because premium credit cards often have high associated fees and low risk, issuers see them as an excellent way to restore profitability in today’s economy.”
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