‘Superprime’ Consumers see Surge in Credit Card Offers
Although the economy and the credit sector is still far from being strong, there does seem to be small changes taking place that are giving many economists reason to be optimistic.
Creditors have begun extending credit to excellent credit card customers, also called “superprime” customers, as evident in the increase in credit card offers being delivered to the homes of these consumers.
In fact, credit card promotional mail volume rose 34 percent between September and October, which equals about 180 million pieces of new mail. This level is the highest it’s been since December 2008. It was also the largest month to month increase in credit card promotional mail volume since 2004.
Lower Credit Card Defaults Equal More Lending
The industry has begun to see a small drop in credit card defaults over the last two months, which may have banks breathing a little easier and offering to extend credit a bit more.
As credit card companies begin to spend more for their marketing efforts, many analysts see signs of credit deterioration beginning to subside.
It’s still important, however, to note that total credit card promotional mail volume is still down a whopping 74 percent from this time last year, which is the lowest level in 10 years.
Affluent Customers Only, Please
Only the most affluent customers will likely see an increase in credit card promotional mail, though, as credit card companies are expected to target only those customers with excellent credit histories and large incomes.
The two largest increases were seen from Chase and American Express over the last two months. Much of this activity from JPMorgan Chase & Co. is due to the release of its newest card, Sapphire.
American Express continues to aggressively compete with Chase to capture the wealthiest of customers, as seen by its increase in marketing spending – nearly $150 million more in the third quarter than the second quarter. American Express notes that it will continue to increase its marketing efforts as loan losses decline.
Credit card companies are also pulling out all the stops with their rewards programs in an effort to snag the affluent sector of the market.
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