US households received nearly 1.3 billion direct mail credit card offers during the first quarter, up 8% from last year, according to Synovate.
The increased mail activity during the quarter resulted in an average of 73% of US households receiving 5.3 offers per month. Response rates for those offers were at 0.4% compared with 0.9% last year.
Synovate attributed this growth in part to several issuers returning to direct mail. During 2003, these issuers were hit by record personal bankruptcies and continued unemployment and, as a result, cut back on their mail volume.
“The modestly improving economic outlook for 2004 combined with continued low interest rates has prompted issuers to increase their mail activity,” said Andrew Davidson, Synovate vice president of competitive tracking services in a statement. “We have seen card mail volume steadily increasing on a monthly basis since the 3rd quarter last year. In fact, March 2004 mail volume was at 473 million, which is the highest monthly volume we have seen since November 2001.”
At the same time, the prospect of interest rates increasing at some point in the future may also be a motivating factor as credit card issuers look to make the most of the current economic environment.
Last year at this time, only 2% of offers promoted APRs of 6.99% or below. That figure has jumped to 18% of all offers during the first quarter of 2004. With APRs at such low levels, issuers are mailing fewer offers with introductory rates for either purchases or balance transfers.
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