Consumers Turning Cold Shoulder To Credit Card Offers
March 19, 2001
Fewer households are applying for credit cards, even though the number of solicitations is up. The typical U.S. household received more than three card offers a month last year, according to the market research firm BAIGlobal.
- Card issuers mailed a record 3.54 billion solicitations in 2000 -- up from 2.87 billion in 1999.
- But the response rate hit what the industry calls a record low of 0.6 percent -- down from 1 percent in 1999.
- Some 75 percent of households already have a general-purpose credit card -- and, of those, the average household has about 2.4 cards.
- About 25 percent of credit-card offers carried annual percentage rates of more than 19 percent - the high rate indicating more companies were pursuing the sub-prime market of consumers with low or no credit ratings.
Many of the offers featured introductory rates as low as 0 percent, which rise sharply later.
Industry sources report that about 5 percent of consumers surveyed applied for a card using the Internet -- up from 2 percent in 1999.
Source: Calmetta Coleman, "Credit-Card Offers Get Record Low in Response Rate," Wall Street Journal, March 19, 2001.
For text (WSJ subscribers)
Browse more articles on Economic Issues