Consumer demand for credit is rising just as credit card issuers are relaxing their lending criteria, making way for new opportunities in credit card marketing, according to Federal Reserve Board data cited in a Tower Group report “Business Strategies for Credit Card Issuers to Address New Regulation and Increase Profits”.
“Essentially, we’re seeing the economy getting stronger, with an easing of credit standards and concurrently an increase in consumer demand for credit, which is great” for the card market, Dennis Moroney, TowerGroup research director, tells PaymentsSource, a Collections & Credit Risk sister publication.
Indeed, consumers are spending more on cards. According to company reports compiled by PaymentsSource, U.S. annual credit and charge card payments volume in 2010 increased 6%, to $1.85 trillion from $1.75 trillion the previous year. The increase comes after a 9% decrease in credit and charge card payments volume in 2009 from $1.93 trillion a year earlier.
With the economy improving, major credit card issuers once again are boosting their ad spending to pre-recession levels.
