U.S. Households receive record 1394.8 million credit card offers reports Synovate's Mail Monitor
30 September 2004
CHICAGO, ILLINOIS — DURING the second quarter 2004, US households received an estimated 1,394.8 million credit card offers according to Mail Monitor®, the direct mail tracking service from Synovate.
Compared with the second quarter 2003, credit card mail volume was up 30% causing response rates to drop from 0.6% to 0.3% among households receiving offers as household clutter increased from 4.6 to 6 offers per month.
"This surpasses the existing Mail Monitor record of 1,370.4 million offers set during fourth quarter of 2001," said Andrew Davidson, Vice President of Competitive Tracking for Synovate's Financial Services Practice, referring to the record mail volume year during which over 5 billion offers were received by US households. "If current mailing trends continue, we will see a new annual record set for credit card mail in 2004", he added.
The second quarter results follow an 8% increase during first quarter 2004 that resulted from several issuers returning to the use of direct mail following cutbacks in 2003. "The conditions that drove the increase in mail volume in first quarter were maintained during second quarter, which is traditionally one of the biggest mailing periods of the year for card issuers," said Davidson.
Along with a modestly improving economy, the prospect of increases in the Prime Rate have caused issuers to flood US households with offers in order to make the most of the low rate environment while it lasts. Consequently, competition for new customers has intensified and there has been a huge increase in the number of offers promoting reward or rebate programs offering benefits that encourage card usage.
During the second quarter 2004, 711.7 million reward or rebate offers were received by US households, up from 464.4 million during the second quarter 2003— a 53% increase. "Offers for co-branded cards are a key part of this group," said Davidson, "however, most of the growth is coming from non-co-branded reward and rebate programs."
Rebate offers accounted for 27% of all offers during second quarter 2004, up from 19% during the same period last year. The cash rebate segment has become particularly competitive demonstrating dramatic growth. Most of the top 10 issuers now promote some form of cash rebate card with some offering promotional deals as high as 10% cash back for certain purchases.
Reward offers that are not linked to a co-branded partner are the other segment fueling the growth. These offers accounted for 19% of the mailbox during second quarter 2004 up from 12% last year. "Issuers are tapping in to cardholder concerns regarding co-branded airline cards by promoting travel rewards programs that can be used with any airline at any time. This is appealing to less frequent-fliers," said Davidson.
However, referring to the slightly lower response rate for reward or rebate offers Davidson explained, "Reward and rebate offers are more likely to be sent to households with better credit histories who receive many offers each month and already own multiple cards. This more cluttered environment keeps the response low."
Contact(s) for this press release
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Andrew Davidson
Vice President |
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222 South Riverside Plaza |
Telephone: +1 914-332-5300 |
Synovate Mail Monitor tracks credit card acquisition volumes and response rates throughout the US, and evaluates attitudes, behaviours, terms, and usage for each card in consumers' wallets. It is a service of Synovate's Financial Services Group, which generates consumer insights that drive competitive marketing solutions in the banking, investments, insurance and payments industries.
For more information on Mail Monitor visit www.synovate.com/mailmonitor.
About Synovate
Synovate, the market research arm of Aegis Group plc, generates consumer insights that drive competitive marketing solutions. The network provides clients with cohesive global support and a comprehensive suite of research solutions. Synovate employs over 6,400 staff across 62 countries.
For more information on Synovate visit www.synovate.com.