Credit-Card Mailings Rise 34%; Debt Rises Too

November 20, 2009

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Financial Services | Trade Shows & Events

Credit-card issuers sent 180 million credit-card offers to US consumers in October 2009, the highest monthly total since December 2008 and the first significant rise in direct mail volume all year, according to the latest monthly direct-mail data from Mintel Comperemedia.

October 2009’s numbers represent a 34% increase over the 134 million credit-card offers sent during September 2009, the company said.

In the face of tight credit markets, increasing government scrutiny, and high unemployment and consumer debt, card issuers have drastically reduced marketing direct mail efforts since the middle of last year. However, October’s month-to-month increase in credit-card direct mail is the highest recorded since February 2004.

This is significant, the company said, because direct mail rebounded from the 2001 recession in early 2004 before reaching unprecedented peaks in 2005/2006.

Chase, Amex Send Most Offers

In October 2009, Chase and American Express sent the most credit-card offers to consumers. Each issuer had its most active mail month this year, as Chase more than doubled mail volume from September 2009 and American Express sent nearly 40% more offers, Mintel said.

US Bank and HSBC (October’s #7 and #8 top mailers, respectively) likewise had their greatest mail months so far in 2009.

“Credit card mail volume is still down significantly from a year ago, but October’s sharp increase is an excellent sign for the industry,” said Andrew Davidson, SVP of Mintel Comperemedia. “With recent green shoots of economic recovery, card issuers feel more confident about the future.

Waiting for CARD Act Implementations?

Despite October’s increases, Davidson did note that some card issuers are still holding back on direct mail in preparation for the next wave of CARD Act implementations. “Once these issuers establish their marketing strategies, I expect they’ll return to the mailbox. This will help drive increases in credit card direct mail next year.”

Overall, Davidson’s predictions are positive. “This winter will mark the start of a turnaround in credit-card direct marketing that will be sustained through 2010,” he said. “This could very well be the beginning of the end for credit card direct mail declines.”

Credit-Card Balances ‘Grim’

Despite this seemingly optimistic outlook for credit card direct mail, a separate study by Synovate found that Americans may not be in such good shape when it comes to their credit-card debt. Credit-card balances? increased to $8,083 in Q309 from $7,489 in Q209 following several quarters of reduced credit-card debt, – partly because of? the stimulus package earlier this year.

Synovate said that reduced credit lines mean consumers are moving their balances to their other cards, causing an increase in the mean balance on the cards that carry a balance.

“A significant proportion of credit card accounts are being closed, either by issuers or by the consumers themselves because of the change in terms proposed by issuers,” said Anuj Shahani, director of competitive tracking services for Synovate’s Financial Services Group.

The Synovate study found that credit limits have continued to drop since the beginning of the year as consumer credit has become harder to access. US households had $26,657 in available credit in Q309 vs. $28,005 in Q2 2009, a drop of 5%. As the pace of new acquisition slows, fewer households can add new credit cards to their wallets.

Additionally, a mere 35% of households in the US received a credit card solicitation in Q309 versus 40% in Q209 and 60% during Q308.

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