More Mail From Credit Card Companies Going To Prime Consumers
In the past few months, credit card marketing mail have fallen drastically as credit card companies cut their losses in the face of a record high delinquency rate. However, the recent drop in credit card delinquency rates and the continuing focus of credit card holders to eliminate credit card debt has given confidence to credit card companies to once again give focus on marketing their products. This time however, credit card companies have shifted their credit card marketing mail towards consumers with very good to outstanding credit card histories.
Credit card companies are now targeting more affluent consumers with their marketing campaigns, perhaps learning from the fiasco caused by the massive defaults coming from subprime borrowers last year. Andre Davidson, research company Mintel Comperemedia’s senior vice president said, “We have seen almost the entire mailbox skew toward prime and superprime consumers”.
The volume of credit card promotional mail is finally picking up which should give the US Postal Services something to be happy about this holiday season. Credit card marketing mail volume from September to October was up by 34%, rising to 180 million pieces of mail. According to Mintel Comperemedia, this is the highest level it has been since December of last year, 2008. This is also the largest increase in credit card mail volume from month to month since 2004, when the industry was also beginning to recover from the recession of 2001.
Credit card companies are getting more comfortable to once again focus on recruiting more credit card holders to their company, owing largely to the fall of credit card defaults from its record level highs. According to analyst Brad Ball from Ladenburg Thalmann, “We are seeing more spending in marketing initiatives now that signs of credit deterioration have eased somewhat. You’ve got more credit stability, less need for significant increases in loan loss provisions, and therefore more capital available to invest in new account acquisitions”.
Credit card marketing mail volume is still way below in terms of year to date rate. Right now, it is down by 74%. Expectations are that it will end at the lowest level it has been in 2009, according to a note by an analyst from Credit Suisse to their clients.
Offers for credit cards are also no longer available for the general consumer population, unlike the past few years when credit card offers reached consumers from all income levels. Credit card marketing mail are now only reaching the mailboxes of consumers who credit card companies consider to be less of a credit risk.
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