Will Credit Card Offers Finally Go Away?

Here's what seems like good news: The response rate for those annoying credit card offers we get in the mail has been falling. (Learn how to opt out.)

According to Curtis Arnold of "In 1998, credit card issuers could count on a response rate of 1.2% to the offers for new cards that they sent out ... The projected response rate this year is only 0.28%, or four times less than what the credit card industry received less than a decade ago ..."

But believe it or not, even a response rate of 0.28% can be well worth it. As Arnold noted, "... 42% of us got our newest card via a piece of mail." So don't expect to see the mailings go away anytime soon -- maybe when the response rate is much closer to zero.

In perspective
The truth is that, in general, response rates to all kinds of advertisements are rather low. In many cases, even a 1% rate is considered a success. Here are some examples I ran across online:

  • According to the Direct Marketing Association, the average response rate for direct mail is 2.61%, suggesting that the credit card industry's mail isn't as treasured by its recipients. It also reported much higher rates for non-profits (5.35%), retailers (3.36%), and travel companies (2.98%), among other industries, than average. Perhaps we enjoy reviewing mailings from stores where we shop more than from accounting services we might use. This is one advantage that investors in companies such as Carnival (NYSE: CCL  ) and Cabela's (NYSE: CAB  ) can add to their lists.
  • The marketing specialists at noted, "One company we've worked with is an office supplies company. They get a 1% response rate when mailing to prospects. When they target current customers, their response rate doubles to 2%." If you're an investor in Staples (Nasdaq: SPLS  ) , Office Depot (NYSE: ODP  ) , or OfficeMax (NYSE: OMX  ) , for example, this can be useful information as you review mailings you receive from the company.
  • The Baseball Hall of Fame, using data from Blackbaud (Nasdaq: BLKB  ) , prepared 3,800 very personalized fundraising mailings for high-end prospects and ended up with a successful 2.6% response rate.

So getting back to our friends at credit card-issuing companies -- their response rates are lousy and getting worse. Still, it's not necessarily likely that they'll scale back their mailings, because in order to get the desired number of responses, they may actually want to increase their mailings. So keep that shredder primed and ready.

Learn much more about the surprisingly interesting credit card industry in our Credit Center.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 538086, ~/Articles/ArticleHandler.aspx, 10/22/2016 2:37:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 17 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
BLKB $64.07 Up +0.44 +0.69%
Blackbaud CAPS Rating: ***
CAB $62.37 Up +0.09 +0.14%
Cabela's CAPS Rating: ****
CCL $46.71 Down -0.49 -1.04%
Carnival CAPS Rating: **
ODP $3.26 Down -0.06 -1.81%
Office Depot CAPS Rating: **
OMX.DL $0.00 Down +0.00 +0.00%
OfficeMax CAPS Rating: *
SPLS $7.54 Down -0.01 -0.13%
Staples CAPS Rating: **