PaymentsJournal

New Credit Card Accounts Up but Volumes Remain Flat

Woman hand holds a credit card and uses a laptop computer to shop online.

Here is news pick up on a recent Mercator Advisory Group Research Note on new account acquisitions.  The big question is “Why has the US Card Industry Booked more than 60 million new credit card accounts since 2015, but total account growth is in single digits?:

Evidently, the industry can book accounts but can issuers retain them?

Think about it.  The rule of thumb is that a new account costs $ 275 to book; without costly introductory incentives many issuers tack on.  With 66 million new accounts, that is over $1 billion.  The economics are upside down.  We book accounts trying to cover account attrition.  It is almost a zero-sum game.

Credit Card Acquisitions: Maximizing Results amid Change answers some of these questions, and offers a view on account retention.

Overview by Brian Riley, Credit Advisory Service at Mercator Advisory Group

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