How to stop the flood of credit card offers

Ever notice how your mailbox seems to be flooded with credit card offers every week? If your residence is like the average U.S. household, you probably get dozens of credit card solicitations in the mail each year. To put an end to them, simply call 888-5-OPT-OUT or go online to www.optoutprescreen.com.

The toll-free number I’ve given you, 888-5-OPT-OUT is an automatic phone service that’s run by the four main credit reporting agencies: TransUnion, Experian, Equifax, and Innovis. (Many of you may be thinking: “What is Innovis?” I’ll tell you more about that company – and the credit report you’ve probably never even heard of – later, in Day 4. For now, though, let’s stay with this OPT-OUT number).

The reason this number works is because it takes you out of the credit bureaus’ databases for pre-screened mailings. This will force the credit bureaus to stop selling your name and address to banks and other institutions that send you credit card offers each month.

Research companies and public-interest groups, such as the Consumer Federation of America in Washington D.C., track the rate at which banks and other credit card issuers send out credit card offers. What they’ve discovered is that some six billion credit card solicitations are sent to people like you and me every year. Imagine that: a whopping six billion credit card offers, or roughly 60 per U.S. household! And the numbers keep rising every year. According to the Mail Monitor report from Synovate, a Chicago-based research company, 90% of credit card mail comes from the 10 largest credit card issuers. If you’re wondering why in the world banks send out so many darned solicitations, the obvious answer is because they’re hunting for new clients. But the less obvious reason is that financial institutions are also responding to changing customer demand. When interest rates rise, banks often increase their mailings because with higher interest rates, people often start looking for fixed rates products on things like credit cards and mortgages. As a result, consumers are more likely to be receptive to new offers for credit. Still, if you’re like most people, you probably tend to give credit card offers the cold shoulder – perhaps tossing them in the trash can without even opening them. That’s why the average response rate to credit card solicitations is miniscule – just 0.2% in 2006 – a record low, according to Mail Monitor and other industry trackers. For all the mail being sent out, direct mail doesn’t seem to be the most profitable way for credit card companies to do business. For starters, they have to send out more than 250 solicitations just to acquire one new customer. That means up to $200 spent to attract every new cardholder.

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