American consumers turning cold shoulder to credit-card offers
Fewer American 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.
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Publish date: 27 March 2001
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