Offers for credit cards sent through snail mail increase in 4Q of last year
Written on February 15, 2010 – 9:28 am | by admin
Though some consumers may be trying to avoid using their credit cards, a recent report indicates they may have also been more likely to get an offer for an account at the end of last year.
According to Synovate, a market research firm, providers of credit cards increased mailings by 46 percent in the fourth quarter of 2009. In all, mailings amounted to 398.5 million offers, an increase from the 272.5 million seen the quarter prior.
Though the numbers of mailings were up in the last quarter of 2009, they are still lower when compared to the year before. During the fourth quarter of 2008, lenders sent out 668.1 million offers for credit cards.
One of the reasons that lenders have cut back on making card offers is because of the tightened credit market during the most recent recession. As consumers found it more difficult to pay off already-existing accounts, lenders became more skittish about giving accounts to risky borrowers.
As a result, credit score requirements for such accounts increased for many lenders so that they could reduce their financial vulnerability. Card companies also changed accounts because of new rules issued by the government regarding how lenders deal with credit cards.
The Credit Card Accountability, Responsibility and Disclosure Act will limit the ability of card companies to raise interest rates. Before the new rules were made clear to companies, many card holders were reticent to send out credit card offers.
“The rules of the game were changing and, until the industry knew what the new rules were, none were keen on playing a blind game,” said Anuj Shahani, director of competitive tracking services for Synovates Financial Services Group.
Along with holding back on issuing offers, the new rules from the Credit CARD Act caused many companies to switch consumers to accounts with variable rates. However, consumers have made their own push back by reducing the amount of credit card debt they have.
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