Consumer Payment Card News

Targeted Mail

A new analysis of mailed credit card offers shows that households who have high balances in relation to their credit lines are the most targeted for new cards. Direct mail credit card solicitations during the third quarter hit 1.29 billion, up 20 million from the prior quarter. U.S. households are expected to receive about 5.3 billion credit card offers this year, compared to 5.76 billion offers mailed in 2006. Synovate’s “Mail Monitor,” says its data show that 363 million of the total offers mailed in the quarter were sent to households utilizing more than 30% of their available credit, compared to 347 million solicitations sent to such households in the second quarter. The market research firm also reported that about half of all households that use more than 30% of their available credit have maxed out by tapping 75% of their credit lines. More than 80% of these “Ultra Utilization” households carry a balance each month and the average revolving balance is $9,722. These households typically have lower incomes yet continue to spend, with 80% charging an average of $1,372 each month. Additionally, Synovate noted that “Ultra Utilization” households receive more card offers than other types of households (6.4 offers per month) and response rates are also higher than average at 0.8% versus 0.5% among all cardholders.

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