Why Banks Are Sending Out More Credit-Card Offers
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What is the main topic discussed in this episode?
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Here's your money briefing for Friday, November 19th. I'm Trini Nuri for The Wall Street Journal, filling in for J.R.
Why are banks sending far more credit‑card solicitations now?
Whalen. Many Americans were able to pay down a big chunk of their credit card debt during the pandemic. But recently, banks are sending out a lot more offers to get them to borrow again.
The issuers are all kind of going after the same pool of people. These are people with good credit scores who are likely to pay their bills, at least their minimum required payment of their credit card bills, but who issuers hope will carry balances from month to month.
Coming up, our credit cards reporter, Anna Maria Andriotis, will discuss what lenders are doing to lure customers in. That's after the break.
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How many mailed credit‑card offers went out in recent months and why does that matter?
Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
If you've noticed that your mailbox is filled with more credit card offers, you're not alone. Banks have been spending billions of dollars to market their credit cards to consumers. But with rising inflation on everyone's mind, will those efforts be enough?
What changes are issuers making to rewards and sign‑on offers to attract customers?
To talk about it, I'm joined now by WSJ credit cards reporter, Anna Maria Andriotis. Hi, Anna Maria. Thanks for being here. Great to be speaking with you. So let's talk about what exactly banks are doing to get people to borrow again. How are they reaching out and what are they offering?
So credit card solicitations are back above pre-pandemic levels. In the third quarter of this year, 940 million mailed credit card solicitations went out. So in addition to that, issuers are making cash back offers and other rewards more generous. That includes increasing the, on average, the cash back amount that is being given out on credit cards has gone up and so have the miles or points. that are being given to cardholders for each dollar that they spend, that they charge to their cards. So another change that's happening is that some credit card issuers are rolling out new credit cards or making changes to their existing ones to appeal to a broader set of consumers. One very clear example of this is a recent announcement by Capital One, which has launched a premium rewards credit card, which comes with access to the bank's first airport lounge.
Now, Capital One is known mostly for subprime credit cards as well as travel rewards credit cards with modest annual fees this new card that the bank has launched has a 395 a year annual fee and is really geared at a different type of set of consumers than those that its prior cards have really been targeted at
How are banks redesigning cards to target different consumer groups?
people who spend more money, who are more affluent, who travel a whole lot. On the other end of the spectrum, American Express, which has been well known for its premium credit cards targeting people who spend a lot of money, who travel a lot, recently added a Walmart benefit to its Platinum card. So this card has a $695 annual fee and has been associated with more high-end experiences. It recently, as part of several changes the company made to the card, added a Walmart benefit to it. So banks are basically venturing in new directions to appeal to a broader set of consumers.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:43
2
Why are banks sending far more credit‑card solicitations now?
0:43–1:27
3
How many mailed credit‑card offers went out in recent months and why does that matter?
1:27–2:19
4
What changes are issuers making to rewards and sign‑on offers to attract customers?
2:19–4:11
5
How are banks redesigning cards to target different consumer groups?
4:11–6:07
6
Why did credit‑card balances fall during the pandemic and is that good for consumers?
6:07–8:20
7
What do rising spending and still‑low balances mean for banks' revenue strategies?
8:20–9:05
8
How might inflation influence future credit‑card borrowing and balances?
9:05–9:14
Speakers
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