Credit Card companies increased mailed offers of credit cards in the fourth quarter of 2009 according to Synovate, a market research firm. After a period of slow down in offers since 2007, the end of 2007 showed a jump of 46 percent with 386.5 million mailed offers. This does not compare with the 1.6 million mailed in the final quarter of 2006 but does show marked differences in credit card marketing since the beginning of the great recession.
A combination of forces led to the dramatic drop off of these mailed offers. As with any recession, high inflation, unemployment, and lowered incomes created debt problems for many consumers causing lenders to take a second look at extending credit to possibly high risk consumers. Offering credit card accounts to only those with higher credit scores, good credit histories, and a known ability to pay protected the lenders from high losses.
Another factor in the increase of offers may be that lenders are beginning to see the impact of the The Credit Card Accountability, Responsibility and Disclosure Act that will take effect in the next week. Many banks have already notified account holders that the terms of their credit card agreements will be changing to increase interest rates and add fees. Many consumers have decided that it is in their best interest to close open accounts to avoid adding to existing credit card debt and paying more. This leaves banks clamoring for more customers.
It is doubtful that the number of credit card offers mailed to consumers will return to pre-recession levels as consumers continue to move away from the use of credit cards, try to pay off debt, and try to save more.
