Although the recession and laws restricting financial marketing have put direct mail credit offers on the decline in recent years, a rebound might be in the cards for 2011.
For some insights, Chief Marketer recently spoke with Andrew Davison, senior vice president of Compreremedia, which tracks credit card direct mail.
CHIEF MARKETER: What volume of credit card mail do you project for 2011?
DAVISON: We certainly anticipate an increase from 2010. According to our latest statistics, we had just under 1.4 billion offers for new credit cards received by U.S. consumers in the fourth quarter of last year, up from 575 million the year before.
There’s a lot of optimism spreading throughout the credit card industry and I anticipate that will increase as we go forward in 2011. We’ll never get back to what we’ve saw in the peak years of 2005 and 2006, but they will certainly be on the increase.
CM: What impact did the CARD Act of 2009 (http://chiefmarketer.com/disciplines/directmarketing/0401-credit-card-mail-rebound/index.html#)—which did things like forbid companies from raising interest rates on existing balances or issuing cards to minors with adult co-signers (unless they proved means to repay the debts)—have on credit card mailings?
DAVISON: Obviously, the CARD Act http://www.creditcards.com/credit-card-news/credit-card-law-interactive-1282.php has had a huge impact. The act caused so many question marks around the products themselves that many issuers just cut back. We’re still seeing some issuers not sure how to respond to the act itself.
CM: Is direct mail still the top means for soliciting new credit card customers?
DAVISON: Direct mail still plays a hugely important role. E-mail is a strong channel fort communicating with existing customers, but in terms of acquisition, direct mail is still the best.
CM: Are credit cards mailers and/or consumers feeling more confident now about the economy?
DAVISON: I think now there’s now a sense of optimism around the credit card industry which is spreading. And that’s due to the fact that fewer consumers are defaulting on their credit cards and that the issuing banks are making more profits.
CM: What’s happening with credit card rewards offers?
DAVISON: We’ve seen significant growth on cash-back offers. They now take up the largest segment of the rewards offers. In the last year they’ve picked up speed and now account for 44% of awards offers versus 31% a year ago.