Credit card direct mail volume increased from the previous quarter in fourth-quarter 2009 for the first time in three years, according to Mintel Comperemedia.
With a 47% increase in direct mail compared to the third quarter of 2009, credit card issuers are showing increased confidence in the economy and a willingness to extend more consumer credit. Many top credit card issuers increased direct mail volume during the fourth quarter, but the biggest bumps compared to the same period of 2008 came from Chase (up 87%) and U.S. Bank (up 64%).
Despite the increase, last year's total direct mail volume still pales in comparison with recent years. Credit card offers sent in 2009 fell 66% behind the number sent in 2008. Pre-recession (2004-2007) card mailings topped seven billion annually while last year's mailings didn't even reach two billion.
"Credit card direct mail volume leveled out mid-last year and finally, in the last quarter of 2009, we saw the long-awaited increase in card offers for consumers," says Andrew Davidson, SVP of Chicago-based Mintel Comperemedia, in a statement. "More direct marketing is an excellent sign for the economy, because it shows issuers gaining confidence and taking a more positive outlook towards gaining new cardholders and reducing delinquencies."
Next month is significant for credit card companies, as another wave of CARD Act regulations goes into effect on Feb. 22. In anticipation of tighter restrictions on credit practices, many companies are trying to rebalance their portfolios. "In this post-recessionary environment, card issuers need to offset potential lost revenue from CARD Act regulations," Davidson adds. "We see more cards being promoted with annual fees and high purchase APRs."
According to Mintel Comperemedia, more than a third of credit card offers sent in 2009 (36%) featured an annual fee, compared to just one in five (20%) in 2008. Purchase rates are also on the rise, despite the steadily low prime rate. On variable-rate card offers sent during the fourth quarter of 2009, the mean go-to APR for purchases was 13.95%, an increase from the average of 11.80% observed during the fourth quarter of 2008.