CHARLOTTE, N.C. — What’s in your mailbox? Chances are, fewer credit-card applications.
Faced with a slumping economy, the nation’s financial-services companies have sharply cut back their direct mail so far this year.
Such unsolicited mailings from banking, credit-card, investment and mortgage-loan companies fell 12.7 percent in the first quarter of 2008 compared with the same period a year ago, according to research compiled by Chicago-based Mintel Comperemedia.
“One of the main drivers definitely has to do with the economy,” said Mintel senior analyst Chris Zagorski. “With credit lines tapped and people struggling to make ends meet, both consumer spending and savings are down.”
The recent drop follows a year of steady decline as banks and consumer lenders reassess their marketing to credit-stretched consumers. At the same time, credit-card and loan delinquencies across the industry keep rising. And competition within the U.S. credit-card market has taken on more importance given industry consolidation and slower balance growth, said Credit Suisse analyst Moshe Orenbuch.
“We believe the decline in mail volume over the past several months is a result of the combination of lower response rates and profit pressures at individual issuers,” he wrote in a recent report.
The number of credit-card and other offers landing in consumers’ mailboxes remains staggering: Financial-service companies sent an estimated 4.2 billion pieces of direct mail in the first quarter, down nearly 10 percent from 4.6 billion in the fourth quarter of 2007.
