October 01, 2009
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Credit Card Industry Barometer, Pt.1
Industry seems to be gearing up for bigger future.It would appear as though the credit card industry is finally testing the waters to see if it's safe to seriously offer new and better credit card accounts. For the longest while, we could see that the large lenders were merely nibbling on the bait when we applied for new and better credit card accounts. Only the very highest FICO were given any serious consideration. The rest of were turned away for already having existing accounts or else slapped with the insult of $300 credit limits @ 27% interest and carrying a $10 annual membership on the first statement. Not gonna fly very far.
But a recent report produced by Mintel Comperemedia informs us that from July through August, the major credit card issuers like BofA, Citibank, Chase and Barclays have been sending out mail offers again. Mintel Comperemedia are a Chicago-based firm that track direct mail offers. Add to that the fact that the bad news for small business credit card offers has finally leveled out. Instead of dropping 82% as they did last year, they have held even (bear in mind, of course, that only 18% of the original remain).
More good news is that Chase Card Services is currently embarking on an aggressive plan to take on Amex. Their launching four new business credit card schemes to build up their small-business type portfolio. One of them closely resembles the scheme of Amex where the card is expected to be paid off every month.
Credit card economists agree that, even if the new Chase initiative is the only change, because Chase is so large and carries so much weight in the credit card industry, this is a significant indicator that the credit freeze appears to be 'thawing out'. It seems reasonable to conclude that the industry has gone to greater lengths to separate good risk from bad risk and can now better assess who to make the offers to.