According to data from Mintel Comperemedia, a market research firm, credit card direct mail solicitations reached the lowest volume in 25 months. The volume was 260 million in April 2012, compared to 390 million in April 2011 or a decrease of 33 percent. The volume in first quarter 2010 was 220 million per month and in June 2011 was 407 million.
“April marks a new low for the credit card direct mail decline that began in December 2011,” says Andrew Davidson, senior vice president at Mintel Comperemedia. “Issuers have adopted a more cautious approach due to an uncertain economic environment. The latest downturn likely reflects a pause in activity rather than signifying a permanent reduction in direct mail.”
Card issuers were somewhat more cautious. The big banks such as Chase, Wells, and Bank of America were cross-selling to customers in their branches. They sent more mailers to upscale consumers with heavy card usage, who pay their cards in full each month.
Card issuers still targeted consumers with lower credit scores and offered low interest rates and cash incentives. According to Mintel, the average cash incentive in first quarter 2012 was $167, compared to $119 a year earlier or a 40 percent increase. .
Increase in more risky accounts
According to TransUnion, one of the three credit bureaus, the proportion of new credit card accounts from consumers with more risky credit scores increased. Those with VantageScores lower than 700 (average rating or a “C”) represented 24.2 percent of the new credit card accounts in 2011, compared to 21.8 percent in 2010. The proportion in first quarter 2012 remained about the same as 2011 at 24.1 percent. VantageScore was developed by all three credit bureaus to predict delinquencies, and the score ranges from 501 to 990, with high score representing low risk.
Even though more risky consumers opened new credit card accounts, the national credit card delinquency rate of accounts over 90 days past due decreased 0.73 percent from first quarter 2012 to fourth quarter 2011. This indicates that more consumers are paying their credit card debt on time.
If you have seen a decrease in credit card offers in the mail, this is the reason. Try to avoid opening any new credit card accounts that you don’t need. If you are looking to switch or open a credit card account, you may find some good incentives from the card issuers right now. And, if you want to eliminate most of your credit card offer then you can “opt out” at www.optoutprescreen.com.
Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here.