Consumer Payment Card News

Card Mail

Credit card mail volume continues to decline for the fourth straight quarter, dropping nearly 20% from one year ago, even though response rates have edged up slightly. The latest figures also show a 25% decrease in May mail volume compared to April, and in June, mail volume was down by 4.5% compared to May. Research by Mintel’s Comperemedia and Synovate’s Mail Monitor both show that the decline in mail volume is led by Citibank, Bank One, Chase, Providian, and American Express. However, direct mail credit card pieces from Capital One and MBNA have continued at the same space. Mintel’s Comperemedia says it shows a 50% decline in card mail volume from Citibank and BankOne. Synovate’s Mail Monitor also reportedly showed that response rates increased to 0.6% for the second quarter of this year, compared to 0.4% one year ago.

But, Mail Monitor data show that response rates in the first quarter of 2003 hit a record 0.9%. Synovate says historically issuers mail more in the second quarter and then cut back in third quarter as US households go on vacation. Mintel’s Comperemedia says that about half of all cards now have an introductory rate on purchases, but introductory rates on balance transfers have become more prevalent in the past 18 months. Card issuers are becoming more likely to offer the introductory rate on only balance transfers. Card issuers continue to use teaser rates to entice new cardholders; 90% of offers have some kind of introductory rate on purchases, balance transfers, or both. Card issuers have also continued to use rewards as part of their acquisition strategy. Approximately 50% of the card offers in June had some type of reward program attached to the card, compared to only 30% in June 2002. Over 80% of these cards have no annual fee attached.

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