Not to be beaten by the opposition, Citigroup is blasting out credit card offers by postal mail in the third quarter, as reported by the Wall Street Journal. Coming to a North American mailbox near you in the third quarter will be around 346 million charge card offers, accord-ing to figures compiled by analysis firm Synovate. That's greater than one for every man, female and child in the United States, at a cost exceeding $240 million.
Deals from Citi already abound
Already among probably the most active mailers in the credit card mar-ket, Citigroup is expected to officially take the crown from Chase once third quarter figures are tabulated. Considering that the business 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 credit cards by United States customers - behind American Express, J.P. Morgan Chase & Co. and Bank of America Corp. - the ground to make up is considera-ble.
Citi believes the worst is long gone
Citigroup is certain that the worst has already hit due to the reduction in non-collectable credit card debt in the U.S. This must be true since the company, when compared to the second quarter of 2010 where it made $154 million, made $584 million in 2011's second quarter.
Citigroup executive Jud Linville sees ample opportunity, as mailings from American Express, Bank of America and Discover all went down substantially last quar-ter.
"This is a business where you look for vacuums," Linville said. "Are there players moving out of certain categories?"
Bridging the void of the Dodd-Frank Act
The Durbin Amendment of the Dodd-Frank Act, which will go into impact in October, will cap the amount of fees banks can collect from merchants per debit card swipe. With all of the caps, the debit cards become less profitable. That means that lots of issuers have dropped all rewards programs associated with the cards.
Citigroup hopes to bridge this void by bringing disgruntled debit card consumers over to its credit cards. This summer, Citi has helped even more by offering cards with simplified fee structure, no annual fee, no late charges and zero percent balance transfers. The company is going to make cash off of any custom-ers that take advantage of the deals.
Deals from Citi already abound
Already among probably the most active mailers in the credit card mar-ket, Citigroup is expected to officially take the crown from Chase once third quarter figures are tabulated. Considering that the business 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 credit cards by United States customers - behind American Express, J.P. Morgan Chase & Co. and Bank of America Corp. - the ground to make up is considera-ble.
Citi believes the worst is long gone
Citigroup is certain that the worst has already hit due to the reduction in non-collectable credit card debt in the U.S. This must be true since the company, when compared to the second quarter of 2010 where it made $154 million, made $584 million in 2011's second quarter.
Citigroup executive Jud Linville sees ample opportunity, as mailings from American Express, Bank of America and Discover all went down substantially last quar-ter.
"This is a business where you look for vacuums," Linville said. "Are there players moving out of certain categories?"
Bridging the void of the Dodd-Frank Act
The Durbin Amendment of the Dodd-Frank Act, which will go into impact in October, will cap the amount of fees banks can collect from merchants per debit card swipe. With all of the caps, the debit cards become less profitable. That means that lots of issuers have dropped all rewards programs associated with the cards.
Citigroup hopes to bridge this void by bringing disgruntled debit card consumers over to its credit cards. This summer, Citi has helped even more by offering cards with simplified fee structure, no annual fee, no late charges and zero percent balance transfers. The company is going to make cash off of any custom-ers that take advantage of the deals.
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