Synovate Mail Monitor finds Americans using their credit cards more than ever

NEW YORK — As the economic doom and gloom rhetoric has become commonplace, Americans generated the highest spend on their credit cards since Mail Monitor, the syndicated credit card tracking service from global market research firm Synovate, began collecting this information more than 20 years ago. On average, households with credit cards are spending $1,559 across all the cards in the wallet in 2010, a 6% increase compared to $1,471 in 2009. This average spend across all cards is on a continual rise, reaching $1,627 for Q2 2010 across all cards in the wallet. The only time consumers spent more was in Q3 2008, the quarter prior to the financial meltdown.

“We are being repeatedly reminded that anybody betting against the US consumer ends up on the losing side. American consumer spending accounts for approximately 70% of the US’s GDP, and a robust spend of over $1,600 suggests that the ’Dr. Dooms’ of the world may be underestimating this economy’s recovery,” said Anuj Shahani, Director of Competitive Tracking Services for Synovate’s Financial Services group.

“This is just one piece of positive data. Synovate Mail Monitor also recorded the third consecutive quarterly increase in credit card mailings since we hit a significant low in Q3 2009. Despite the uncertainty introduced by the CARD Act, Fin Reg, and other such legislative changes, we are seeing the credit card issuers get back to market, trying to entice consumers once again,” Shahani added.

During Q2 2010, US households received 640.3 million credit card offers, an 83% increase, versus 349.1 million offers mailed during the same time a year ago. Chase was the lead issuer, quadrupling their mailings versus the same period in the prior year. Citibank, the second largest mailer for Q2 2010, demonstrated a major comeback by showing significant growth quarter over quarter, almost triple their mailings from Q1 2010. Discover is another notable comeback, showing an increase in mailings of 70% versus the prior quarter.

“Discover is an intriguing story. They were the first card issuer to convert to variable rate offers as the credit crisis unfolded, a strategy later adopted by almost all other issuers. But since starting in this trendsetter position, Discover seems to have lost its way. At a time when other issuers are introducing new products and coming up with creative solutions to address the legislative challenges, Discover has been sticking with the same products, barring one, which seems to be lifted from another issuer’s playbook,” said Shahani.

“The Discover card is now actually accepted more than American Express and also has almost 90% of MasterCard and Visa’s acceptability. Yet, we haven’t seen any evidence of them marketing this achievement in offers or anywhere else. It’s odd that Discover doesn’t want people to know that their card is accepted at more places than Amex, a counterintuitive strategy or perhaps lack thereof,” he added.

In addition to increased mailings, issuers are incentivizing consumers to get them to sign up for their credit card. Introductory offers have increased to 71%, the highest since Synovate Mail Monitor began tracking this data back in 1988.

“Issuers want to get you to use their card, that’s the whole purpose of getting new customers. They are willing to offer you a 0% Intro rate for purchases, if that’s what it takes to become the top card in your wallet,” said Shahani.

Overall, the credit engines are chugging along and gaining speed. Synovate Mail Monitor expects a total of 2.25 billion offers to be mailed by the end of the year, a 62% increase versus 1.39 billion mailed offers seen in 2009.

About this survey

Mail Monitor uses the Synovate Global Opinion Panel (SGOP) of approximately 450,000 US households recruited to conduct surveys via mail (the online component of the SGOP consists over a million households). The study is conducted on a monthly basis and each participating household collects credit card offers from the first to the last day of the month. Over a period of a year, 14,000+ unique households participate in Mail Monitor and report on over 30,000 credit cards they own and 30,000 to 50,000 credit card offers they receive. Credit cards, for the purpose of this study, are defined as general purpose cards (i.e., American Express, Discover, MasterCard or Visa branded) and charge cards. Small business offers received by participating households are included in the study. Participants refer to their latest credit card statements to fill out the questionnaire gathering existing credit card information. The data are weighted on Age and Household Income, and FICO scores are appended to the data at the end of each month. Mail Monitor clients include the majority of leading card issuers and brands as well as stock analysts and consultants. To see the survey questionnaire please click here: http://www.synovate.com/news/article/extra/20100810/8-10-10-mm-questionnaire.pdf

About Mail Monitor

Synovate Mail Monitor tracks credit card acquisition volumes and response rates throughout the US, and evaluates attitudes, behaviours, terms, and usage for each card in consumers’ wallets. It is a service of Synovate’s Financial Services Group, which generates consumer insights that drive competitive marketing solutions in the banking, investments, insurance and payments industries.

For more information on Mail Monitor visit www.synovate.com/mailmonitor.


About Synovate

Synovate, the market research arm of Aegis Group plc, generates insights to help clients drive competitive brand, product and customer experience strategies. A truly borderless company with offices in over 60 countries, our ’biggest small company’ approach combines best in class global research capabilities with personalised service, local knowledge and the flexibility to create teams and processes that meet clients’ specific requirements. At Synovate, our clients sit at the top of our organisational chart, driving us to continually develop more innovative research solutions that predict actual business outcomes.

For more information on Synovate visit www.synovate.com.