Credit Card Pitches Reach New High in Canada
Credit card solicitations to Canadian consumers for the first quarter of 2001 reached a new high of 45.8 million, with 73 percent coming from U.S.-based credit card issuers, according to a study released by Mail Monitor, the direct mail acquisition tracking service of BAIGlobal Inc.The mail volume was up from 44.9 million for the fourth quarter of 2000. The study is based on a sample of 400 Canadian households.
The majority of Canadian credit card holders own classic bankcards, rather than upgraded gold or platinum cards. The survey found that only seven percent of Canadian households own a platinum card, compared to 28 percent in the U.S. BAIGlobal claimed that U.S. credit card issuers are looking to capitalize on this by offering Canadians upgrades to their cards. The survey found that 69 percent of solicitations for the first quarter of 2001 were for platinum cards.
BAIGlobal reported that the Canadian consumer response rate to credit card offers for the first quarter of 2001 was 0.9 percent, compared to the U.S. rate of 0.7 percent. While BAIGlobal attributes the low U.S. response rate to mailbox clutter, the company claimed that the low Canadian rate is due to a higher penetration of credit cards in Canada, where 89 percent of households have a card, compared to 76 percent in the U.S.
"U.S. companies are mainly competing on pricing, such as offering low introductory APR rates. They are generally cheaper than competing Canadian card issuers," said Andrew Davidson, vice president of competitive tracking services for BAIGlobal, Tarrytown, NY.
