Ad Opportunity: Credit Card Companies Targeting a New Kind of Consumer

 

The credit card industry has long marketed to consumers who wanted to buy now and pay later, sometimes much later, for goods and services. Over time, credit card companies hiked interest rates and fees to increase profits. But these practices resulted in restrictive legislation which went into effect in February 2010. As a result, credit card companies can  no longer apply the highest interest rates to all outstanding balances and they cannot frequently shift payment due dates. The new legislation and the high rate of defaults on payments by consumers who are mired in debt are leading companies to market to the kind of consumer they long ignored – the one who pays off the card balance every month.

There are fewer of these kinds of consumers in the marketplace so credit card companies will be competing harder for business. According to a report by Marketplace from American Public Media, credit card companies will be “strengthening and bolstering the quality of their rewards programs.” In other cases, credit card companies are adding rewards for debit card use. Consumers can now earn bonuses like airplane miles or cash back when they pull out their debit cards.

The bottom line for financial companies is they hope to court the best consumers with their new credit card programs now. This new business arrangement will hopefully lead to improved loyalty once consumers begin seeking out loans, mortgages and other services during the gradual economic recovery. Contact credit card companies in your market and suggest a fresh ad campaign to help them win new customers.

[Source: Vanek-Smith, Stacey. "Credit card biz shift: Penalties to perks." Marketplace, Public Radio. Web.  22 Feb. 2010]