Credit Card Solicitations

Mail Monitor^® Tracking Service reported that annual U.S. credit card acquisition mailings declined to 4.89 billion in 2002 from the record high of just over 5 billion offers registered in 2001. The 2% change marked the first decrease in mailings since 1999, while the trend in response rates was virtually unchanged at 0.5%—remaining at or below 1 percent since 1999.

In the historically low prime lending rate environment, offer terms were more attractive than in the previous year. Not only was the average APR almost 2.3% lower in the fourth quarter of 2002 than a year earlier (11.28% vs. 13.77%), there was a 17% increase in the number of offers promoting 0% introductory rates for both balance transfers and purchases.

Given the high cost of acquiring new cardholders and the economic uncertainty generated in part by the possibility of war, issuers concentrated their efforts on higher-income households. Households with income of $50,000 or more received 66% of mailings in the fourth quarter of 2002 compared with 51% a year earlier.

Andrew Davidson, Vice President of Competitive Tracking Services for Synovate, notes that despite the stagnation in response rates, "...direct mail solicitations still produce millions of card applications each year." Mail Monitor^® estimates that in 2002, 28 million card applications resulted from such acquisition efforts.

BAIGlobal, the creator of Mail Monitor^®, was brought under the umbrella of global market research firm Synovate that emerged in January 2003. Mail Monitor^® is now a branded product offered by Synovate's Financial Services Practice.

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