May 6, 2009
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News: Mintel Reports, Credit Card Use Down
Mintel Comperemedia is a technology based program and provides a searchable database which tracks marketing activities via print and email in the U.S. and Canada. Mintel provides companies information on their competitors’ direct marketing strategies, promotions, and pricing to help them advance and improve their own business. For over 35 years Mintel has offered an overview of diverse markets which include consumer households, insurance, investment brokers, banks, small businesses, and credit statistics. Mintel’s latest market research shows that consumers are using their credit cards less these days. According to the report, 42% of the respondents say they are using their debit cards more and opting out of credit card use. An additional 22% said they have reduced spending and rely less on both debit and credit cards. A sweeping 83% of total respondents said that because of the recession, they have re-evaluated their spending habits.
American consumers aren’t the only ones monitoring their personal spending habits. Credit card companies have made some changes in the allocation of their own marketing resources as well. The massive influx of delinquencies and defaults in the wake of a recession, have forced lenders into reducing the number of credit card solicitations. During first quarter 2009, issuers reduced the number of solicitations in half since fourth quarter 2008. The firm estimates the total number of solicitations for first quarter 2009 fell to less than 500 million, the lowest three month total since 2000. On the other hand, the number of debit card solicitations doubled while checking account solicitations rose by 29%.
According to Stephen Clifford, Vice President of Financial Services at Mintel Comperemedia, it looks as though lenders are changing marketing strategies because of a “volatile economy.” They are focused on minimizing more losses by reducing the number of credit card offers. Banks are turning instead to growing the sale of other products like checking/savings accounts, debit cards, and relationship building.