Interest rates on new credit card offers remained unchanged
Wednesday for the fifth consecutive week, according to the
CreditCards.com Weekly Credit Card Rate Report.
Rates on all 100 cards tracked by CreditCards.com stayed the
same this week. As a result, the national average annual percentage
rate (APR) remained fixed at 14.96 percent.
Promotional offers -- including 0 percent balance transfer
offers and introductory APRs -- were also unchanged.
This week marks the 22nd week this year that interest rates have
remained flat. Credit card issuers have been slow to change card
offers for most of 2013.
For a brief period, card issuers were more active. Between April
24 and June 19, for example, the national average spiked three
times and fell twice as card issuers tested new APRs on a select
number of cards. The activity didn't last long, however. Most card
offers haven't changed since June.
Issuers dial back summertime marketing
Credit card terms aren't the only items receiving less attention
this summer. Issuers also spent considerably less money on direct
mail offers last month -- a sign that they may be dialing back
marketing efforts after ramping up briefly in May.
Twelve percent fewer offers were mailed to consumers' homes in
June, according to a research note released July 22 by the
financial services firm Credit Suisse, which cited Mintel
Issuers substantially increased the number of glossy mailings
sent to consumers' homes earlier this summer, but then cut back
significantly the following month.
Overall, 328 million targeted offers were mailed in June -- down
from 360 million offers in May.
The cutbacks aren't nearly as much as those made in 2012,
however. Despite the month-over-month drop in credit card mailings
between May and June, the total number of offers sent last month is
still slightly above average for 2013.
So far, card issuers have mailed, on average, about 327 million
offers per month over the first six months of 2012.
That's significantly above the amount mailed in 2012, when
issuers were spending far less money on direct mail. Overall,
consumers have received about 23 percent more offers this year than
in the first six months of 2012.
Last year, the number of offers were dialed back by nearly half
and issuers instead focused on other, cheaper methods for marketing
cards to new customers.
"Last year was characterized by a significant slowdown in mail
volume as the two largest mailers in 2011 (Citibank and Chase)
notably slowed," wrote Credit Suisse Analysts Moshe Orenbuch and
Meredith Roscoe in Monday's note.
This year, issuers -- especially Citibank -- are competing more
fiercely for new accounts and are pouring far more resources into
attracting new cardholders, say analysts. (Mailing offers directly
to consumers' homes is particularly expensive compared to other
forms of credit card marketing.)
"Competitiveness among the large commercial banks has
increased," wrote Orenbuch and Roscoe in the note.
Citibank, specifically, has sent the largest number of mailings
over the past 12 months, according to CreditSuisse.
In June, the majority of offers consumers received were from
Citi. New card offers from Capital One, Discover and American
Express also made up a substantial portion of the offers landing in
Overall, issuers are expected to mail about 3.6 billion offers
by the end of 2013, according to analysts at CreditSuisse -- up
from 3 billion in 2012.
Issuers still aren't spending nearly as much money on direct
mail offers as they did before the recession, however.
In 2007, for example, issuers mailed 7.2 billion offers,
according to data released by Credit Suisse. In 2006, issuers sent
8.1 billion offers -- more than twice the number of offers that
issuers are projected to send in 2013.
The smaller number of offers that issuers now mail underscores
just how much the financial services industry has changed since the
Credit card issuers are slowly loosening their standards for new
cardholders and reaching out to a broader pool of applicants.
However, they are still very cautious about the amount of risk
they're willing to take on attracting -- and accepting -- new
Credit reports now show your credit card
Card delinquencies hit 22-year lows