MasterCard: Women Are Key
To Relationship Banking Success
PURCHASE, N.Y.-The economic downturn hit men harder than women, and women are leading the recovery and increasingly controlling household finances.
That finding, from research from MasterCard, suggests women are emerging as an essential target for relationship banking efforts-and are key to developing profitable and enduring consumer relationships, the company said.
MasterCard has released a new whitepaper that outlines the changing demographics, the importance of female consumers when seeking to grow relationships with targeted consumer segments, and tangible action items for credit unions, banks and other financial institutions.
Among the findings:
* 95% of women are financial decision makers in their household, proving the importance of winning over this key audience.
* 33% of women prefer to keep all accounts at a single financial institution, providing opportunity to build on existing relationships.
* With women focused on budgeting and financial management, there is significant opportunity for financial institutions to provide online solutions for these activities as the first step to building relationships.
For info: www.mastercard.com
Credit Card Defaults, Late
Payments Continue to Drop
BIRMINGHAM, Ala.-Credit card defaults and late payments dropped again in April, falling to levels last seen in 2008, according to LowCards.com.
The company said five of the six top credit card companies reported both delinquencies and defaults dropped in April to multi-year lows, another sign of recovery for credit card issuers.
Among other findings:
* Bank of America was the only major issuer that reported a rising default rate in April. The bank's annualized charge-off rate, which reflects uncollectible balances, was 8.25% in April, up from 8.18% in March. Bank of America's charge-off rate peaked at 14.53% in August 2009. Late payments dropped to 4.52% of balances annualized (the lowest level for the bank since mid-2006), down from 4.82% in March.
* American Express still leads the industry with the lowest rate of charge-offs and defaults. Charge-offs were 3.5% of balances on an annualized basis for April, down from 3.7% in March. Late payments were 1.7% in April, down from 1.8% in March.
* Citi's default rate was 7.85% of balances on an annualized basis, down from 7.89% in March. Late payments fell to 3.87% in April, down from 4.21% in March.
* Capital One's defaults dropped to 4.97% annualized. That was down from 5.87% in March. Late payments dropped to 3.41% of balances, down from 3.59% in March.
* Discover's charge-off rate was 5.02% of balances in April, down from 5.18% in March. The delinquency rate dropped to 3.15% in April, down from 3.42% in March.
* JPMorgan Chase's defaults were 5.6% in April, down from 6.02% in March. Late payments dropped to 2.8%6, down from 3.08% in March.
LowCards.com is a free Web site that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It promises an unbiased ranking and review for each card.
For info: www.lowcards.com
New Bank Card Originations
Increased 28% From 2010
ATLANTA-New bank card growth has returned, with year-over-year total number of originations (Feb. 2011 vs. Feb. 2010) up by more than 28%, according to Equifax's April National Credit Trends Report.
Notable within the data is that lenders continue to expand the subprime category with Feb. 2011 subprime bankcard originations up by more than 75% over Feb. 2010 numbers, and total new subprime bankcard credit up by more than 66%.
Total new bank card credit limits are increased by more than 27% YOY, reflective of the increase in total new bankcard volume.
Other key findings:
* Individual new bank card average credit limit decreased slightly from the previous year (Feb. 2011 average of $4,008 vs. Feb. 2010 average of $4,086)
* Average subprime bank card credit limit has decreased slightly as well, from $1,025 (Feb. 2010) to $977 (Feb. 2011)
"The latest Equifax Credit Trends Report indicates a market reversal relative to bank card originations," said Michael Koukounas, SVP-special client services for Equifax. "The industry experienced significant credit limit contraction of almost $1 trillion during the Great Recession, driven by aggressive risk management and high levels of inactive account closures. With the latest data, we are seeing some loosening of credit overall, particularly among subprime bank card originations compared to this time last year."
For info: www.equifax.com.
Additional resources can also be found at www.cujournal.com.
