Credit Card Mailers Decline on Mortgage Woes

Direct mail credit card offers declined in the fourth quarter as card issuer’s concerns about the ongoing mortgage crisis created uncertainty and cost-cutting, according to market research group Synovate.

Roughly 1.29 million offers were sent out, a 14% decrease from the same period a year ago, when more than 1.5 million were sent, while the response rate was flat at 0.5%.

For all of 2007, mail volume was down nearly 10% to 5.2 billion from 5.8 billion in 2006.

The company said the decline could be attributed to subprime borrowers affected by the mortgage crisis that are no longer being marketed to because of their perceived credit risk.

It was led by Washington Mutual, who sent 73% fewer solicitations, followed by Citibank with a 52% drop, Discover with 50% less, and HSBC with a 34% dip.

According to Synovate, Washington Mutual and HSBC reduced their offerings because they targeted subprime borrowers, while Citi and Discover’s cut backs were tied to their own mortgage-related earnings woes.

Only 57 percent of households with household incomes under $35K received an offer in the fourth quarter of 2007, compared to 67 percent in Q4 2006, indicating that low-income households are also on the avoid list.

Despite all that, Chase actually increased their credit card mailers by a whopping 62 percent over last year, largely because it was less impacted by the mortgage crisis.

One in four mailers came from Chase, while American Express also upped their credit card offers by 27% compared to the same period a year ago.

(top photo: mattmcgee)

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