CreditCards.com

Research, regulation, industry reports

Credit card offer mailings continued to fall in Q2, data shows

Jeremy Simon

Lenders and borrowers may be suffering, but the ongoing credit crunch appears to spell relief for mailmen’s aching shoulders.

That’s because mailbags could be lighter amid a notable decrease in credit card offers. New research from media monitoring service Mintel Comperemedia shows that United States banks continued to mail fewer credit card offers during the April to June period, for the third-consecutive quarterly decline. The estimated number of credit card offers mailed in the second quarter was down nearly 8 percent from the first quarter, Mintel says.

mintel.jpgAfter peaking at an estimated 1.86 billion pieces in the third quarter of last year, credit card direct mail offers have headed south. The second quarter’s card offer volume is off 17 percent from the 2007 level.

Mintel’s senior analyst, Lisa Hronek, says the economy is to blame for the drop in credit card offers. “Undoubtedly, this is a symptom of the global credit crunch,” Hronek says via press release. “Record losses from the subprime fallout and rising delinquencies have squeezed issuers’ credit so tight, they’re tapping out. Add that to the fact that consumers’ credit is already stretched and you’re left with a tough market for credit card issuers.”

As recently as last month, credit card issuers remained stingy about extending loans: Data from the Federal Reserve shows that banks aggressively tightened lending standards in July.

For some major lenders, that appears to be part of an overall approach that includes all banking offers and loans in general, while other banks “realign their acquisition marketing efforts,” Mintel says.

Mintel data shows that in the last year:

  • Discover and Citibank both cut credit card mail (by 18 percent and 31 percent, respectively). Each realigned marketing strategies, with Discover increasing its share of loan mail to 12 percent and Citibank increasing its share of banking mail to 8 percent in Q2 2008 (from 4 percent and 1 percent, respectively, in Q2 2007).
  • Discover increased its loan mail volume by over 200 percent and Citibank increased banking mail by over 700 percent.
  • Bank of America held steady on credit card mailings and boosted its mortgage and loan promotions by 26 percent.
  • Capital One and Chase also maintained credit card mail volume but each cut lending offers (by 26 percent and 33 percent, respectively) while increasing banking direct mail (by 80 percent and 60 percent).
  • HSBC reduced credit card, banking and loan mail volume across the board, sending 52 percent less offers overall.

Update (8/20/08): Comperemedia is currently in the process of examining July mail, but already foresees the downward trend extending well beyond the summer. “I expect credit card acquisition mailings will continue to taper off throughout 2008 and extending into 2009,” Hronek says via e-mail. “Issuers are attempting to ride out ever-present news of record losses and delinquencies, all the while redefining their notion of the ideal customer. Simultaneously, consumers are redefining their own notions of the ideal credit card,” she says.

See related: Economy sags, mailboxes empty as card issuers cut direct mail offers, Loan officers’ survey: Credit card lending standards tighten sharply

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, we ask that you do not disclose confidential or personal information such as your bank account numbers, social security numbers, etc. Keep in mind that anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.