Citigroup is stepping up its charge card deals by mail in a large way, writes the Wall Street Journal. Arriving at a North American home near you in the 3rd quarter will be around 346 million credit card offers, accord-ing to figures published by re-search firm Synovate. That's greater than one for every man, female and child in the United States, at a cost exceeding $240 million.
Massive leap from someplace on top
Already among the most active mailers in the credit card mar-ket, Citigroup is expected to formally take the crown from Chase once third quarter figures are tabulated. During the financial crisis, the company lost hundreds of millions of dollars, which is why executives think it is money well spent to send out postal mail.
Currently, Citigroup is in fourth place for dollars spent on credit cards by U.S. customers putting it behind American Express, J.P. Morgan Chase & Co. and Bank of America. That means that it has lots of work to do, as shown in the Nilson Report.
Worse is gone
Citigroup is convinced that the worst has already hit due to the reduction in non-collectable credit card debt in the U.S. In the second quar-ter of 2011, Citigroup made $584, showing this must be true. This is because a year before, $154 million was reported by the company as earnings.
Citigroup executive Jud Linville sees ample opportunity, as mailings from American Express, Bank of America and Discover all went down significantly last quar-ter.
"This is a business where you look for vacuums," Linville said. "Are there players moving out of certain categories?"
Dodd-Frank Act takes away cash
Merchants will be stopped from charging too much cash for debit card swipe fees in Oct. This is be-cause of the Dodd-Frank Act's Durbin Amendment. Many issuers of debit cards no longer offer rewards programs since the cards aren't almost as profitable with these caps.
Citigroup hopes to bridge this void by bringing disgruntled debit card consumers over to its charge cards. Citi has decided to help even more by offering several deals to consumers. Cards can have zero percent balance transfers, no late charges, no annual fees, or even simplified fee structures. Custom-ers who bite on Citi's flood of offers will be profitable for the company.
Massive leap from someplace on top
Already among the most active mailers in the credit card mar-ket, Citigroup is expected to formally take the crown from Chase once third quarter figures are tabulated. During the financial crisis, the company lost hundreds of millions of dollars, which is why executives think it is money well spent to send out postal mail.
Currently, Citigroup is in fourth place for dollars spent on credit cards by U.S. customers putting it behind American Express, J.P. Morgan Chase & Co. and Bank of America. That means that it has lots of work to do, as shown in the Nilson Report.
Worse is gone
Citigroup is convinced that the worst has already hit due to the reduction in non-collectable credit card debt in the U.S. In the second quar-ter of 2011, Citigroup made $584, showing this must be true. This is because a year before, $154 million was reported by the company as earnings.
Citigroup executive Jud Linville sees ample opportunity, as mailings from American Express, Bank of America and Discover all went down significantly last quar-ter.
"This is a business where you look for vacuums," Linville said. "Are there players moving out of certain categories?"
Dodd-Frank Act takes away cash
Merchants will be stopped from charging too much cash for debit card swipe fees in Oct. This is be-cause of the Dodd-Frank Act's Durbin Amendment. Many issuers of debit cards no longer offer rewards programs since the cards aren't almost as profitable with these caps.
Citigroup hopes to bridge this void by bringing disgruntled debit card consumers over to its charge cards. Citi has decided to help even more by offering several deals to consumers. Cards can have zero percent balance transfers, no late charges, no annual fees, or even simplified fee structures. Custom-ers who bite on Citi's flood of offers will be profitable for the company.
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