Not to be out-done by the competition, Citigroup is blasting out charge card offers by mail in the 3rd quarter, as reported by the Wall Street Journal. Arriving at a North American home in your area in the third quarter will be approximately 346 million credit card offers, accord-ing to statistics authored by re-search firm Synovate. That amounts to over one per individual in the U.S., at the cost of $240 million.
One in three credit card offers were already Citi
Already among the most active mailers in the credit card industry, Citigroup is expected to officially take the crown from Chase once 3rd quarter numbers are tabulated. Considering that the company has re-portedly lost hundreds of millions of dollars on charge cards during the financial cri-sis, executives believe the mass mailing will be money well spent.
As the Nilson Report confirms that Citigroup currently ranks fourth in dollars spent on charge cards by U.S. consumers - behind American Express, J.P. Morgan Chase & Co. and Bank of America Corp. - the ground to make up is considera-ble.
It's only going to get better from here
Citigroup is convinced that the worst has already hit due to the reduction in non-collectable credit card debt in the U.S. The figures bear this out, as the business made $584 million in the second quarter of 2011, versus a $154 million loss a year before.
This can be a good opportuni-ty with the rivalry slowing down with mailings, as reported by Citigroup executive Jud Linville. Last quarter, there were less mailing from Bank of America, Discover and American Express.
"This is a business where you look for vacuums," Linville said. "Are there players moving out of certain categories?"
Attempting to make up for lost cash
In Oct, the fees banks charge for debit card swipes will be capped by merchants because of the Durbin Amendment of the Dodd-Frank Act. Several issuers of debit cards no longer offer rewards programs since the cards are not nearly as profitable with these caps.
The idea Citigroup has is to make up for this. It plans on getting people interested in its credit cards for this reason. To grease the wheels, Citi has offered charge cards with simplified fee structures this summer, some with no annual fee or late charges, others with zero percent balance trans-fers. Consumers that take advantage of the offers will end up making Citi some cash. It will be worth it in the end.
One in three credit card offers were already Citi
Already among the most active mailers in the credit card industry, Citigroup is expected to officially take the crown from Chase once 3rd quarter numbers are tabulated. Considering that the company has re-portedly lost hundreds of millions of dollars on charge cards during the financial cri-sis, executives believe the mass mailing will be money well spent.
As the Nilson Report confirms that Citigroup currently ranks fourth in dollars spent on charge cards by U.S. consumers - behind American Express, J.P. Morgan Chase & Co. and Bank of America Corp. - the ground to make up is considera-ble.
It's only going to get better from here
Citigroup is convinced that the worst has already hit due to the reduction in non-collectable credit card debt in the U.S. The figures bear this out, as the business made $584 million in the second quarter of 2011, versus a $154 million loss a year before.
This can be a good opportuni-ty with the rivalry slowing down with mailings, as reported by Citigroup executive Jud Linville. Last quarter, there were less mailing from Bank of America, Discover and American Express.
"This is a business where you look for vacuums," Linville said. "Are there players moving out of certain categories?"
Attempting to make up for lost cash
In Oct, the fees banks charge for debit card swipes will be capped by merchants because of the Durbin Amendment of the Dodd-Frank Act. Several issuers of debit cards no longer offer rewards programs since the cards are not nearly as profitable with these caps.
The idea Citigroup has is to make up for this. It plans on getting people interested in its credit cards for this reason. To grease the wheels, Citi has offered charge cards with simplified fee structures this summer, some with no annual fee or late charges, others with zero percent balance trans-fers. Consumers that take advantage of the offers will end up making Citi some cash. It will be worth it in the end.
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