Americans have generated the highest spend on
their credit cards year-on-year for more than 20 years, according
to Mail Monitor, the credit card tracking service from market
research company Synovate.
Anuj Shanhani, director of competitive
tracking services for Synovate’s Financial Services Group, argues
that despite legislative changes and the ‘Dr Dooms’ of the world,
credit card issuers are getting back into the market.
The average spend across all cards is on a
continual rise, reaching $1,627 for the second quarter this year.
When American credit card spend is averaged over a quarterly basis,
the only time consumers spent more was in the third quarter of
2008, the quarter prior to the economic crisis.
“We are being repeatedly reminded that anybody
betting against the US consumer ends up on the losing side,” said
Shanhani.
“American consumer spending accounts for
approximately 70% of the US’s GDP, and a robust spend of over
$1,600 suggests that the ‘Dr Dooms’ of the world may be
underestimating this economy’s recovery.”
Synovate also predicts that Americans will
also receive 2.25bn credit card offers by the end of the year, a
62% increase on 2009.
Research by Synovate shows that during the
second quarter of the year, US households received 640.3m credit
card offers, which is an 83% increase compared with the same period
a year ago.
“This is just one piece of positive data.
Synovate Mail Monitor also recorded the third consecutive quarterly
increase in mailings since we hit a significant low in Q3 2009,”
Shanhani added.
“Despite the uncertainty introduced by the
CARD Act, Financial Regulation Bill, and other such legislative
changes, we are seeing the credit card issuers get back to market,
trying to entice consumers once again.”
Chase was found to be the lead issuer,
quadrupling its mailings in the last year, and Citibank, the second
largest mailer has tripled its mailings in the last quarter.
Synovate also reports that Discover “demonstrated a major comeback”
by showing an increase of 70% in mailings compared with the
previous quarter.
“The increase in direct-mail marketing is due
to our significant investments in new products and features,” said
Paul Hartwick, director of communication and public affairs for
Chase card services.
“It supports our overall strategy, and we
believe it gives us a competitive advantage. We have made
significant investments in building the Chase card business and our
suite of products during this economic downtown and are already
seeing benefits from that.”
In addition to increased mailings, issuers are
incentivising customers to get them to sign up to their credit
card. Introductory offers have increased to 71%, the highest since
Syonvate Mail Monitor began tracking the data over 20 years
ago.
“Issuers want to get you to use their card,
that’s the whole purpose of getting new customers. They are willing
to offer you a 0% intro rate for purchases, if that’s what it takes
to become the top card in your wallet,” said Shanhani.
