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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