Consumer response to gold card offers hit a record low of 1.1% in the first quarter, while mailings remained steady, according to a study by BAI Mail Monitor.
In contrast, the overall response rate to credit card offers of all kinds was 1.4% last year, said the Tarrytown, N.Y. firm, which tracks direct-mail card offers.
"It appears that gold cards are not breaking through the clutter because they are not perceived as being markedly different from standard cards," said Robert Skolnick, executive vice president of BAI.
Furthermore, the tracking firm found the average base interest rate on gold cards has increased slightly in the first quarter, to 16%, while the introductory rate has slipped to a new low.
Recent solicitations, including those from Citibank, have offered introductory rates on gold cards as low as 5.9%.
Initial credit lines on gold cards have steadily increased as well, jumping from a $2,500 average in 1991 to $4,500 in 1995, according to BAI.
"Consumers seem to be much more aware of the value of a low base rate," primarily because of the industry's education efforts, said Mr. Skolnick. "While there are segments of the population who continue to be driven by low intro rates, response patterns suggest that consumers now are motivated by low base rates."
Overall, BAI found that mailings in the first quarter were down about 8% from first quarter 1995, to 668 million.
Meanwhile, research from MasterCard International shows that the number of gold cards issued and the spending on those cards has steadily increased over a five-year period.
In 1995, spending volume on MasterCard gold cards was $79.4 billion, up from $30.2 billion in 1991. Similarly, the number of cards issued jumped from 16.1 million to 39.9 million.
The growth continued into this year. In the first quarter, gold card spending grew to $20.7 billion, $4 billion more than in the same period last year. Issuance of gold MasterCard cards grew from 34.7 million in 1995's first quarter to 41.8 million in same period of this year.
MasterCard said gold card performance was a key driver of its overall growth in the first quarter.
Issuers remain cheerleaders for the product. A spokesman for AT&T Universal Card Services said it believes "gold cards are perceived as bringing greater value and prestige compared to standard cards" but may seem less exciting now "because people have more opportunities to get them."
Said a spokesman for MBNA Corp.: "If there is a slowdown (in gold card growth), we are not seeing it." MBNA signed up a record five million new customers in the first half. In the first quarter alone it signed 2.2 million, most of whom wanted gold cards.
