Credit Card Offer Mailings Down
Sep 1st, 2008 | By Rob | Category: Credit Cards
The New York Times reported that credit card offers sent via the mail in the second quarter of 2008 are down about 14 percent over the second quarter of 2007. Does this mean that we’ll be free from their junk mail in our mailbox anytime soon? That seems unlikely. They still sent out an amazing 1.54 billion pieces of mail, at a cost of about $1.25 each.
Some of the commentary in the New York Times article suggests that this is a “flight to quality.” That term became common place last fall as investors sought to discard toxic mortgage backed securities for safer and lower-yield investments. Now, some are suggesting that the credit card companies are trying to hedge their bets against credit card delinquencies by increasing their offers for safer loan types.
“Discover has doubled its volume of loan offers from last year to this , and Citibank has sent out seven times as many retail-banking offers.”
It remains to be seen whether this shift from credit cards to other types of loans will be better for the consumer. Perhaps it is a sign of credit card companies attempting to diversify their marketing ahead of the coming credit card reform from Congress. Or perhaps it means that consumers have gotten wise to the methods of credit card companies and are unwilling to expand the number of cards in their wallet. But those might be loft hopes - it may simply mean that credit card issuers are discovering that their earnings are too dependent on credit cards and that they must diversify to keep their shareholders happy. We will have to wait and see whether these new loans turn as attractive to, and problematic for, consumers as their credit cards.
