Drop in Credit Card Direct Mailings: a Final Relief?

Many consumers have noticed that now they receive less credit card offers in the mail. And not without reason. As the recent research shows, there has been 8% decrease in credit and loan direct mailings since the first quarter of 2008.

Generally, since the 3rd quarter of 2007 direct mail had been falling steadily. In the last year the volume of credit card ads sent by mail was 1.86 million while now this number reduced to 1.54 million. Are there any sound reasons for this 17% decline?

It is a well-known fact that for most people unsolicited credit card offers are extremely objectionable. They are considered as annoying litter and sometimes as a danger for identity. However, companies practicing this marketing tool maintain that it is really one of the most effective advertising methods. Direct mail usually presents credit cards in detail, giving a full description of the cards' features, benefits and interest rates. So, companies are sure that direct mailing helps them get new clients.

Many analysts are sure that the drop in direct mail volume is the natural result of credit crisis and an evident indicator of economic recession. Banks try to save their money on advertising and prefer to work with old reliable customers to searching for new ones. Another distressing issue is reduced number of bad credit options sent to people with low credit score. In 2007 more than 65% of consumers with limited credit receive mailings, and only half of them found bank offers in their mailboxes in the 2nd quarter of 2008.

Of course, for many people the fall in direct mailing is good news, as in a lot of cases consumers just throw them away as "pesky scam". But financial experts are annoyed: banks cut the volume of credit card offers by mail because credit delinquencies have become more frequent. Banks have been incurring losses, so they provide fewer chances for bad credit customers to be offered a low interest credit card deal. Surprising though it may seem, many households who are still in the banks' mailing lists noticed there are more advantageous credit cards offers sent to them. There is no other explanation than the prime rate cut which resulted in lower interest rates and fees.

The amounts of solicitations have been reduced by small banks as well as giants of credit market. Thus direct mailing was significantly decreased by Citibank which is in a financial squeeze and HSBC which is especially interested in consumers with less than perfect credit score. At the same time, Chase Bank and Capital One keep sending the usual amount of ads. Discover credit card offers by mail are also reported to be cut.

The majority of credit issuing companies brought down the solicited and unsolicited credit card offers by mail. In spite of this, consumers with positive credit rating are not going to lose under the circumstances. In fact, lenders will be more loyal to reliable cardholders and those with high credit score.

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