A leading international media monitoring service claims the nation’s credit crisis has caused credit card companies to cut back significantly on the number of direct mail credit card offers they send to consumers. However, this expense savings has had little impact on the card transaction fees being paid by gas stations and convenience stores.
A leading international media monitoring service claims the nation’s credit crisis has caused credit card companies to cut back significantly on the number of direct mail credit card offers they send to consumers. However, this expense savings has had little impact on the card transaction fees being paid by gas stations and convenience stores.
Analyzing credit card direct mail trends, Mintel Comperemedia found the total estimated volume for credit card acquisition offers reached only 1.34 billion during the third quarter of 2008. Credit card acquisition mail volume has declined steadily since late 2006, according to Mintel Comperemedia. The estimated mail volume of 1.34 billion in the third quarter represents a 13 percent decline from the previous quarter, and a 28 percent drop from the year-ago quarter. In 2005 and 2006, Mintel Comperemedia tracked an average of 2.07 billion credit card acquisition offers quarterly.
As the financial crisis and credit crunch worsened during the third quarter of 2008, card issuers scaled back mailings at an increasing rate, noted Lisa Hronek, senior credit card analyst at Mintel. But declines in credit card acquisition mail volume started long before that:
"Credit card companies have been cutting back direct mail dollars for years, as they realize that blanketing Americans with credit card offers doesn't translate to increased sign up or card usage," Hronek said. "But now, they're facing a two-fold problem that is much worse. Not only are consumers tapped out financially, but issuers are also facing record losses. They're scaling back direct mail to cope with unprecedented financial problems."
However, shouldn’t gas station and convenience store owners get some relief from skyrocketing card transaction fees -- much of which goes to support credit card companies’ marketing efforts -- as the credit card companies reduce their marketing expenses?
Mintel doesn’t address this side of the equation, but Hronek said she expects credit card companies to continue reducing acquisition direct mail throughout the holiday season and into 2009. Mintel Comperemedia reports that the top 10 mailing credit card issuers for acquisition direct mail in the third quarter were:
1. Chase
2. Capital One Bank
3. American Express
4. Washington Mutual*
5. Bank of America
6. Citibank
7. Barclays Bank
8. Discover
9. HSBC
10. U.S. Bank
*Now owned by Chase
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