Twenty Years of Mailbox-Stuffing,
Forest-Clearing Card Competition
NEW YORK–Twenty years ago Mail Monitor began tracking credit card direct mail volume and response rates.
To mark that anniversary, the company has released an analysis of the card market and credit card marketing that compares 1988 with 2008. At the time it began tracking the market, the company reported that “One major anonymous issuer was so concerned about the information the survey would reveal to its competitors that it even offered Synovate a significant amount of money to stop the launch.”
“Response rates were higher then due to the comparatively low level of household mail clutter,” said Andrew Davidson, vice president of competitive tracking Services for Synovate’s Financial Services Group. “Following the introduction of FICO scores in 1989, the overall response rate increased to an all time high of 2.8% in 1992. The subsequent increase in overall mail volume led to a steady decline in the response rate, which bottomed out in 2000 and has remained relatively stable ever since at around 50 basis points,” he added.
“Despite consolidation, the credit card industry is now much more competitive,” continued Davidson, “In 1988 the majority of offers were for regular bankcards, with gold card offers emerging as the premium alternative. Most offers carried an annual fee and average APRs were above 18%. Now, a Platinum card is considered standard fare and the true premium cards are MasterCard World, Visa Signature and bank issued Amex cards. Most cards carry no annual fee and the mean APR is just 13%. The gap between the prime rate and the mean go-to APR has been squeezed over the years due to increased competition.”
For info: mailmonitor.synovate.com.
Spastic Over Plastic
1988
49% of US households received 2.0 credit card solicitations per month
1.9% response rate
Top five mailers (in order): Citi-bank, American Express, Chase Manhattan, Chevy Chase, First Card
2008
73% of US households receive 5.5 credit card solicitations per month
0.5% response rate
Top five mailers (in order): Chase Bank, HSBC, Bank of America, Capital One, American Express
