US consumers received approximately 1.2 billion direct mail offers for new credit cards in the third quarter of 2010, a sharp increase from the 391 million received in Q3 2009, according to data from Mintel Comperemedia. The top senders of credit card mail are Chase, Citi, American Express and Discover, according to Mintel.
The business intelligence firm also found that eight in 10 mailed credit card offers are for rewards cards that give points, miles or cash back to consumers, up from six in 10 offers in 2008. This is a result of credit card issuers focusing their efforts on consumers who are likely to pay their balances in full each month, said Andrew Davidson, SVP at Mintel.
“I anticipate the ratio of eight in 10 to be roughly the same next year,” he said. “However the total volume of acquisition offers to consumers will increase as competition continues to heat up. There is still some slack to be taken up in the market as some issuers continue to hold back to due to the new regulations.”
Cash-back credit card promotions accounted for 41% of all rewards offers in Q3 of this year, compared to 28% a year ago, Mintel also found. Additionally, 45% of offers mentioned the word “groceries” in the mailing text this year, a 25% increase over a two-year span.
Davidson said there has been a “shift in consumer attitudes [toward] saving more and spending less.” He added that “as a result, card issuers are focusing more on rewards for everyday items. The cash-back credit card has been the ideal card to promote during this environment.”
Davidson predicted competition in the credit card industry will increase into the next year.
“Rewards cards have become the plain vanilla card of the new era because so many people have them and rewards offers dominate the mail,” Davidson said. “Card mailers need to be more innovative than ever to make their offers stand out. They also need to leverage rewards programs to establish truly [loyal] customers post-acquisition.”
