Consumers Continue to Ignore Credit-Card Offers

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Although credit-card issuers are flooding customers with direct mail designed to stimulate card use, recipients are tossing the overwhelming majority of the pieces into the trash, according to new research by market research firm BAIGlobal Inc., Tarrytown, NY.

Each month, holders of more than half of all general purpose cards in the marketplace received at least one communication aimed at getting them to retain their cards and use them more, according to Inside Track, BAIGlobal's credit-card retention and activation study. The letters encourage an array of transactions, including purchases through discounts at merchants, balance transfers through special checks or ATM cash advances with low special rates.

Immediate response to the offers was a meager .5 percent, the study revealed. Response by consumers holding onto the offers to use them in the near future was a healthier 3 percent, but only 20 percent to 30 percent of those passive responders ultimately take advantage of the promotion at a later date. For example, the cardholders may hold a balance transfer check until they need extra cash for an upcoming vacation or hold onto restaurant coupon until the next time they dine out.

"Because the majority of people carry more than one credit card, it's imperative issuers do all they can to win their loyalty," said Lisa Itzkowitz, director of marketing for BAIGlobal. "But with direct mail costs rising, it's critical that issuers mail efficiently and maximize response to their card-usage programs."

The higher response of cardholders planning to use the marketing offers suggests the promotions are catching customers' eye but don't have a strong call to action. Direct mail reminders, including placing a message in the billing statement the following month or mailing the promotion again in a separate envelope, are ways to boost immediate response. Reminding consumers through other channels -- including telephone, e-mail or the issuer's Web site -- could stimulate response as well, according to Itzkowitz.

"It may be just the need to remind people that it's better to use the offer sooner than later," she said. "For instance, if you use a discount at a restaurant by the first of May you get off 15 percent, but if you hold it until August you get 10 percent."

Holders of about 50 percent of cards in the marketplace receive the offers each month as inserts included in their monthly bill, while 15 percent received separate mailings, the study said.

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