Research and Statistics

Direct mail credit card offers plummeted in 2008

Direct mail credit card offers fell to the lowest volume in eight years, and those offers declined most steeply for people with low incomes.

According to data released today by the Chicago-based direct marketing research firm Mintel Comperemedia, the number of mail offers has resembled the American economy for the past two years: falling fast. Mail offers peaked in 2006 at 8.3 billion, fell to 7.4 billion in 2007 and fell again to 5.4 billion in 2008, the firm reported.

Annual change in estimated direct mail volume by top 10 mailers

Top 10 credit card acquisition mailers of 2008 Percent change 2007-2008
American Express -10%
Bank of America -28%
Capital One -9%
Washington Mutual -6%
Citi -36%
Discover -18%
Barclays Bank 28%
First Premier Bank -34%
Source: Mintel Comperemedia

The drop was sharpest in the fourth quarter of 2008. Mail offers were down 33 percent from the third quarter of 2008.

‘No choice’
“With reduced funds available for lending and increased loan losses, credit card issuers had no choice but to drastically cut direct marketing for new cards during 2008,” said Stephen Clifford, Mintel Comperemedia’s vice president of financial services.

The decline in direct mail is one more piece of evidence that credit card issuers are sharply cutting back on lending. On Feb. 2, the Federal Reserve Board released its quarterly survey of senior loan officers, which showed that more than half of lenders said they tightened their credit card lending standards in the last three months of 2008.

The drop in mail offers was not evenly divided, either in where the mail came from or whom it went to. Of the top 10 card issuers, HSBC cut back the most in using mail to acquire new customers, cutting back by 61 percent. At the other end of the scale, Barclays Bank actually increased their mail offers by 28 percent. 

The emptiest mailboxes belonged to households with income of less than $50,000, Mintel said. They saw a 42 percent drop in credit card offers. People in households earning more than $100,000, though, probably didn’t notice any difference — offers to them fell by just 1 percent. 

“Credit card issuers shifted direct marketing strategy to focus on higher earning, lower risk consumers,” Clifford said. “2008 was an adjustment year for the credit card industry as issuers were confronted with economic conditions not seen in decades. In 2009, I expect less volatile fluctuations in mail volume as the industry positions itself to ride out the recession and recover.”

See related:Fed report: Card issuers continue to tighten up on lending

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In Research and Statistics

Fed report: Banks continue to tighten lending standards

Banks remain hesitant to extend credit to consumer borrowers, according to the results of the fourth-quarter 2008 Federal Reserve survey of senior loan officers.

Published: February 2, 2009

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Credit Card Rate Report Updated: September 18th, 2019
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