Card Companies Send More Mail Offers

In a dramatic change of events, credit card issuers are starting to once again send credit card offers to American mailboxes. The new revelation is forcing economists to wonder whether the U.S. economy is on the road to recovery.

Industry specialists agree that the increase in card offers has come as a pleasant surprise, especially with Americans having to contend with card companies closing shop. The job market has also improved in recent months, raising hopes that an economic recovery is well on the way. Economists, however, caution against rash speculation, adding that different economy measuring factors are showing mixed signs.

Credit card solicitations have actually gone down in this year's second quarter compare to the earlier months. However, the decline has been considerably milder at six percent - a far cry from the double-digit drops during the height of the recession last year.

2008 also saw fewer mail solicitations from card issuers. During the second quarter period of the previous year, card companies sent out 1.06 billion in card offers through the mail. Throughout last year, though, banks and issuers scaled back their solicitations by a whopping 44 percent. For the end of this year's second quarter, some 349.1 million mailed offers were sent. The figure is lower by 6.2 percent when compared with the amount sent during the first quarter.

Despite the drop, more and more major banks and card companies are stepping up their efforts in looking for new cardholders. The nation's largest banks, Bank of America, and Citibank, posted significant increases in mail solicitations. The Bank of American, for instance, sent 55.2 million offers during the second quarter. That amount is 77 percent higher than the previous period. Citibank, for its part, mailed 56.1 millions offers to potential cardholders - a 65 percent increase.

Analysts say that most credit card offers are for variable-rate cards because of the looming implementation of the Obama administration's CARD act. Experts contend that fixed-rate cards and even traditional forms of credit cards are also being sidelined in favor of alternatives like payment and secured credit cards.

Economists say that if the number of mail solicitations is to be used for assessing the economy, then the U.S. may be on the road to recovery. They add that while the figures may be promising, Americans have to take into consideration that card companies are on the lookout for potential cardholders who want the convenience of credit cards, minus the risks.

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.