Monday, Nov. 2
Posted 11 a.m.
Bankrate reporter Leslie McFadden contributed this entry.
These days you might be getting fewer solicitations for your credit cards in your mailbox, but the offers you do receive may have lousier features, according to new research from Mintel Comperemedia, a Chicago-based market research firm.
Credit card issuers sent 71 percent fewer offers in the third quarter of 2009 compared with the same period last year. Consumers received 391 million offers, down from 1.3 billion solicitations. The volume of offers declined by 7 percent since the second quarter.
The advertisements that did arrive had less attractive features. Only 6 percent had fixed interest rates, compared with the 27 percent that promoted unchanging APRs a year ago. Just 5 percent of solicitations that had an introductory rate presented a promotional period of 13 months or more, down from half of all offers, and 21 percent gave the cardholder less than six months to enjoy the teaser rate. Balance transfer fees of 4 percent and 5 percent appeared on 16 percent of offers, which were rare a year ago.
The Credit Card Accountability, Responsibility and Disclosure Act requires promotional rates to last at least six months. This provision doesn't kick in until February, however, along with most of the changes. As research published last week from the Pew Charitable Trusts proves, none of the cards from the top 12 banks is in full compliance with the law yet.
Meanwhile, nonpromotional interest rates have crept higher. The average purchase APR on variable-rate card offers climbed to 12.53 percent from 11.43 percent in the first quarter, according to Mintel.
The Pew Charitable Trusts study showed that the lowest advertised APRs for all credit cards offered online by the 12 largest banks have climbed more than 20 percent since December 2008. Median rates from the 12 largest credit unions were about 20 percent lower than the APRs on bank cards.
Compare credit union cards and bank cards on Bankrate.com.
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