Credit card direct mail back on the rise

Card issuers increase direct marketing as economy levels out
Chicago (January 28, 2010)—It wasn’t just holiday cards and catalogs filling your mailbox last month. Mintel Comperemedia, a service that provides direct marketing competitive intelligence, reports that in Q4 2009—for the first time in three years—credit card direct mail volume increased from the previous quarter.
With a 47% increase in direct mail compared to Q3 2009, credit card issuers demonstrate increased confidence in the economy and willingness to extend more consumer credit. However, last year’s direct mail volume still pales in comparison with recent years. Mintel Comperemedia reports that the total number of credit card offers sent in 2009 falls 66% behind the number sent in 2008. Pre-recession (2004-2007), card mailings topped seven billion annually; last year, they didn’t even reach two billion.
“Credit card direct mail volume leveled out mid-last year and finally, in the last quarter of 2009, we saw the long-awaited increase in card offers for consumers. More direct marketing is an excellent sign for the economy, because it shows issuers gaining confidence and taking a more positive outlook towards gaining new cardholders and reducing delinquencies,” states Andrew Davidson, SVP of Mintel Comperemedia.
Next month is significant for credit card companies, as another wave of CARD Act regulations take hold on February 22. In anticipation of tighter restrictions on credit practices, many companies are trying to rebalance their portfolios. “In this post-recessionary environment, card issuers need to offset potential lost revenue from CARD Act regulations. We see more cards being promoted with annual fees and high purchase APRs,” comments Andrew Davidson.
According to Mintel Comperemedia, more than a third of credit card offers sent in 2009 (36%) featured an annual fee, compared to just one in five (20%) in 2008. Purchase rates are also on the rise, despite the steadily low Prime rate. On variable rate card offers sent during Q4 2009, the mean go-to APR for purchases was 13.95%, an increase from the average of 11.80% observed during Q4 2008.
Many top credit card issuers increased direct mail volume during Q4 2009, but the biggest bumps compared to the same period of 2008 came from Chase (up 87%) and U.S. Bank (up 64%).