NEW YORK — Not only are far fewer offers for credit cards being made, more often those solicitations are for cards carrying an annual fee, according to Mail Monitor, a direct mail tracking service from Synovate.
During Q1 2009, U.S. households received 372.4 million offers, representing a 67% drop from the 1,131.6 million offers received during Q1 2008, the company said. Twenty-seven percent of offers carried an annual fee during Q1 2009, up from 18% one year ago.
"As issuers continue to cut back offers and the mailbox becomes more superprime we are seeing a proportionately higher number of card offers with an annual fee," Andrew Davidson, VP of competitive tracking services for Synovate's Financial Services Group said in a release.
Fee-based cards reflect an increasing proportion of both reward/rebate and non-reward/rebate card solicitations, Mail Monitor said. In Q1 2009, 24% of reward/rebate offers carried an annual fee versus 18% in Q1 2008. At the same time, 42% of non-reward/rebate offers carried an annual fee versus 19% in the prior year.
According to Mail Monitor, cardholders who currently own a fee-based card typically own multiple cards but have just one fee-based card in their wallet. The fee-based card is the card that tends to be used most often.
"If this trend continues, the battle for share of wallet will intensify," predicted Davidson. "In a fee-based environment, consumers will be more likely to own just one or two credit cards and will not have the appetite for the level of multiple card ownership that has fueled the growth of the industry in recent years."
