• by Sarah Mahoney  @mahoney_sarah, August 12, 2008

Given all the melodrama in the credit markets, it's not surprising that credit-card companies cut back again this quarter on direct mailing. But what is surprising is how much.

 

"Overall, companies cut back their credit-card mailings to their lowest levels since 2003, and Citibank's mailings are its lowest levels in 10 years," says Andrew Davidson, VP of competitive tracking services for Synovate, which tracks credit-card offers. "That's a significant drop."

Synovate says that the number of credit card offers mailed to consumers fell 17% during the second quarter, to 1.06 billion. In addition to steep drops at Citibank, which posted a decline in mailings of 45%, HSBC mailed out 54% fewer solicitations. Only two companies, Bank of America and Washington Mutual, increased their mailings in the first quarter. And only WaMu and Capital One mailed more than they did in the second quarter last year. Response rates were flat, at 0.6%.

Also remarkable, Davidson says, is how steep the cutbacks are among mailings to lower-income households. Just 52% of households with incomes under $50,000 annually received an offer this quarter, compared to 66% in the same quarter a year ago. "So these low-income and high-risk households, already squeezed by the credit crunch, are receiving fewer offers for new cards," he says.

"Direct mail is such an important channel for this industry, but it does tend to be cyclical," he says, predicting that mailings will not begin bouncing back until early 2009. "We're in the middle of a trough right now."

The findings are part of Synovate's ongoing Mail Monitor study, which tracks credit card acquisition volumes and response rates throughout the U.S.