Creditors now Targeting Wealthy Consumers, Small Businesses More than Ever
Just a few years ago creditors were targeting subprime borrowers as an easy way to make money. This profitable niche has since collapsed, leaving many creditors no choice but to rethink their target customer.
With consumer credit card debt soaring and credit card losses hitting an all-time high, creditors must scramble to pinpoint a new consumer, and it looks like the wealthy borrower and the small business owner are the main targets.
Setting their Sights on the Wealthy, Small Businesses
For example, JPMorgan Chase has begun an effort to increase its market share for wealthy consumers and small businesses. This market was always dominated by American Express, particularly during the last few years when most creditors were jumping on the subprime borrower bandwagon.
American Express, long known for catering to wealthy consumers and corporations, is now recognizing that other creditors are trying to inch their way into this stable market. Although American Express also targeted subprime borrowers over the years, its main business was with affluent and corporate customers.
Other creditors looking to get in on this lucrative market include Discover, Citigroup and Bank of America. These are the same creditors, however, that are struggling with outstanding losses from defaulted subprime borrowers.
JPMorgan has recently launched its newest card for their wealthy customers, called the Sapphire card, as well as three new credit cards targeted at small businesses.
Chase has also stepped up its game and aimed its sights at small businesses, and has the promotional mail to prove it. In fact, Chase has sent out more promotional mail targeted at small businesses than any other credit card company, nearly doubling the number of promotional mailings that they would normally send out.
Many of the credit card companies are looking to enter this lucrative market by offering rewards; however, this may prove challenging, as the rewards offered by American Express are highly valued by customers.
In fact, American Express has been consistently ranked first in JD Power’s annual pool about consumer credit card satisfaction.
In the midst of all of these credit card changes, one thing’s for certain: credit card companies are sure to target the most lucrative customer at any given time.
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