Citigroup is stepping up its credit card deals by postal mail in a big way, writes the Wall Street Journal. Arriving at a North American home in your area in the third quarter will be around 346 million charge card offers, accord-ing to statistics published by re-search firm Synovate. That's greater than one for every man, wom-an and child in the U.S., at a cost exceeding $240 million.
Citi sending too several deals already
Citigroup was already among the most active mailers. After third quarter results are tabulated, it could even conquer Chase for the top spot. 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.
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.
It's only going to get better from here
Continued reduction in non-collectable charge card debt across the U.S. has certain the powers at Citigroup that the darkest clouds of re-cession have passed. 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.
This can be a great opportuni-ty with the opposition slowing down with mailings, according to Citigroup executive Jud Linville. Last quarter, there were less mailing from Bank of America, Discover and American Express.
"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
In Octo-ber, the fees banks charge for debit card swipes will be capped by merchants because of the Durbin Amendment of the Dodd-Frank Act. This makes debit cards significant-ly less profitable for issuing banks, which in turn has caused several issuers to drop costly rewards programs.
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 many deals to customers. Cards can have zero percent balance transfers, no late charges, no annual fees, or even simplified fee structures. Consumers that take advantage of the offers will end up making Citi some money. It will be worth it in the end.
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