Credit Card Direct Mail Volume Hit 5 Billion in 2001
Mail Monitor, BAIGlobal's direct mail acquisition tracking service, found that 79 percent of U.S. households received an average of five credit card offers a month last year, up from 73 percent of households receiving an average of 4.1 offers in 2000.
However, BAIGlobal said response rates remained at 0.6 percent.
"The stable response rate is attributable to a weak economy and consumers' continuing need for credit," said Andrew Davidson, vice president of competitive tracking services at BAIGlobal, Tarrytown, NY. "Despite high mailbox clutter generated by a flood of competitive offers, particularly during the second half of the year, consumers still wanted credit cards."
The record volume resulted from a renewed emphasis on platinum card offers, an increase in introductory rate promotions for balance transfers and an influx of reward and co-branded offers, he noted.
Davidson said that the mail volume in 2001 triggered 33 million applications for new credit cards, up from 22 million a year earlier. Of all bankcard offers, 72 percent were for platinum cards, up from 64 percent in 2000. And 78 percent of platinum card offers carried an introductory APR for balance transfers, compared with 63 percent a year earlier.
"With an expected slowdown in purchase activity, the fight for balances by competitive card companies has become more intense," Davidson said. "The low prime rate has enabled issuers to offer very attractive promotional rates and extend the length of these offers."
BAIGlobal said the proportion of standard and gold card offers promoting low introductory APRs for balance transfers escalated in 2001. Standard bankcards promoting a low introductory APR doubled to 34 percent, from 17 percent in 2000. Gold cards offering similar deals soared to 18 percent, from 4 percent in 2000.
The company also noted an upswing in the popularity of affinity and co-branded card mailings. Offers for affinity cards -- those that are linked to charities, unions and other nonprofit organizations or associations -- rose to 9 percent in 2001, from 6 percent in 2000. Mailings for co-branded cards -- those linked to retail, financial services, airlines and other profit-making institutions -- rose to 15 percent, from 12 percent.
Response rates for affinity cards were in line with the industry average at 0.6 percent, BAIGlobal said. Co-branded response rates, which are traditionally higher than the industry average, were 0.9 percent in 2001.
There also was an upswing in rebates, point incentives and other reward offers, particularly in the fourth quarter of 2001, BAIGlobal said. Rebate and reward offers accounted for 29 percent of credit card mailings in the quarter, up from 9 percent in the same quarter a year earlier.
"Issuers are trying every angle possible to attract new card members," Davidson said.