Credit Card Companies Mailed 63% Fewer Offers Last Quarter

Credit Card Companies Mailed 63% Fewer Offers Last Quarter

December 15, 2020         Written By Heaven Speirs

As Americans approach the end of 2020, we can finally quantify some of the effects of COVID-19. According to research from Competiscan, there has been a significant drop in mailed credit card offers this year, despite a slight increase in average credit scores for pre-screenings.

Mailed Credit Card Offers Are Down 63% Versus Last Year

Competiscan found that credit card companies only mailed 407 million credit card offers in the third quarter of 2020. By comparison, the same companies mailed 1.1 billion card offers in the third quarter of 2019, marking a 63% decline versus last year. During the same period, there was a 53% decline in mailings for the insurance, telco and financial services sectors combined.

Ironically, pre-screened credit scores have actually increased slightly during the pandemic. The average FICO score for mailed offers was 748 in the third quarter, up 3 points from the previous quarter. That may be partly due to the forbearance programs from the early months of the COVID-19 outbreak. With most of those programs now subsiding, it is possible that average scores will fall below their mid-year measures.

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What Caused the Drop in Credit Card Offers?

The sharp decrease in mailings is most likely the result of economic uncertainty. Earlier this year, the Consumer Financial Protection Bureau reported a drastic decline in credit card applications from March to May 2020. Cardholders were reluctant to take on new debt, and card issuers were leery of how their customers might pay for their bills, especially since credit card loans are unsecured. The low number of card offer mailings appear to be rooted in caution, and it’s unclear as to when that caution may subside.

How Are Americans Handling Credit Card Debt in the Pandemic?

Despite the fact that 42% of Americans have missed a bill payment this year, consumers appear to be managing their credit cards well. In July, the Federal Reserve reported a $104.4 billion drop in revolving debt compared to last year. From March to April 2020 alone, there was a $58 billion decline. This seems to be a direct result of stay-at-home orders throughout the country, combined with workload reductions and income loss.

There are still some concerns for the future. Approximately 39% of consumers say they will likely skip a payment in the near future, and one in three say they will need to use their credit cards to cover their expenses.

Traditionally, credit card debt spikes in the last quarter of the year because of holiday-related expenses. The spike may not be quite as high this year since many Americans are foregoing their family get-togethers. Nevertheless, the holiday season could still change the way consumers handle their credit cards this year.

If you are worried about holiday debt, check out these helpful guides:

The information contained within this article was accurate as of December 15, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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heaven

About Heaven Speirs

Heaven Speirs is a contributing writer for LowCards.com. She remains up-to-date with the latest developments in the credit card industry and the financial sector as a whole. Heaven has over 10 years of experience in online journalism, the bulk of which has been focused on personal finance. Heaven attended Oklahoma State University, where she discovered her talent for research and content creation. In her spare time, Heaven enjoys painting, playing poker, and spending time with her husband and three dogs.