Study: Credit Card Solicitations Slip
Typically, consumers get just over 1 billion solicitations quarterly, but direct marketers tend to send fewer in the first quarter. January, for example, had the fewest offers with only 293 million, one of the lowest numbers in the past 27 months.
The study from the Chicago-based company also found that interest rates offered generally ranged from 8 percent to 12.99 percent, with slightly more variable rates offered than fixed rates. The lower the rate, the more likely it was a variable rate.
Of the offers that included an introductory rate, more than 90 percent offered 0 percent, up slightly from last year. The study also found that last year marketers began experimenting with offering the introductory rate for longer than 12 months, and this trend continued into 2003. The peak in offers with introductory rates for 12 months or more was in October when credit card marketers begin vying for holiday shopping dollars.
Cards with lower interest rates can come with hefty penalty charges, the study found.
Issuers may offer a variable rate of less than 5 percent, but the default rates can range from 19 percent to 26 percent. Cards with a regular interest rate of 5 percent to 7.99 percent have similar penalty rates, and the penalty rates rose slightly in 2003.
Late fees and over-limit fees also are rising. More card issuers charged $31 to $40 if the payment was late. Historically, the late fee has been $21 to $30. When a consumer goes over his credit limit, the fee can range from $21 to $40, with more issuers charging $31 to $40.