Synovate Mail Monitor shows credit card terms improve, more fixed rate offers
14 December 2007
NEW YORK — Terms for new credit cards have improved in response to the cut in the Prime Rate according to the latest data from Mail Monitor, the direct mail tracking service from global market research company Synovate.
During October 2007, the average Single/Go-to APR based on credit card solicitations was 12.51%, down from 12.94% in third quarter. The Single/Go-to APR is the rate that a card jumps to following its introductory or promotional rate period.
"The 50 basis point reduction of the Prime Rate in September had an immediate impact on credit card offers," said Andrew Davidson, Vice President of Competitive Tracking Services for Synovate's Financial Services Group. "Issuers began to promote lower rates but fixed them in anticipation of further cuts to the Prime Rate," he added.
As a result, 39% of offers received by US households in October promoted fixed Single/Go-to APR's compared to just 29% during the third quarter. The average Single/Go-to APR for fixed rate offers dropped to 10.55% from 11.03% over the same time period.
Issuers increasing the volume of lower fixed rate offers include Chase, Bank of America and Discover.
"Discover, in particular, has embraced this strategy by mailing offers that are now almost exclusively fixed. This is a complete reversal to what we saw earlier in the year when all Discover offers were variable," said Davidson.
Discover introduced an 8.99% fixed rate offer in October while Chase and Bank of America mailings continued to promote fixed rates as low as 7.99%. The lowest fixed rate offers captured by Mail Monitor in October were from First National Bank of Omaha (5.99%) and RBS Citizens Bank (6.99%).
Contact(s) for this press release
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Jennifer Chhatlani
Global Marketing Director |
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222 South Riverside Plaza |
Tel: +1 312 526 4359 |
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 generates insights to help clients drive competitive brand, product and customer experience strategies. Now part of Ipsos, with offices in over 80 countries, our approach combines best in class global research capabilities with personalised service, local knowledge and the flexibility to create teams and processes that meet clients' specific requirements. At Synovate, our clients sit at the top of our organisational chart, driving us to continually develop more innovative research solutions that predict actual business outcomes.
For more information on Synovate visit www.synovate.com.