Growth in new credit card accounts has stalled largely because financial institutions’ appetite for risk in their portfolios has not increased significantly since the recession. This sentiment is strongest among tier 1 banks, some of which are still winding down their highest-risk portfolios, having acquired them at the peak of economic turmoil. Several vendors have developed analytics-based solutions that can help issuers profitably lend to potentially risky consumers, but for the most part, they are waiting for issuers to decide the time is right. Mercator Advisory Group’s latest Research Note, Innovative Strategies for Credit Card Account Acquisition, examines how credit issuers are effectively marketing products and originating accounts in the current economic climate.

1. Innovative Strategies for Credit Card
Account Acquisition
April 2014

2. 2014 Mercator Advisory Group
Growth in new credit card accounts has stalled largely because
financial institutions’ appetite for risk in their portfolios has not
increased significantly since the recession. This sentiment is
strongest among tier 1 banks, some of which are still winding down
their highest-risk portfolios, having acquired them at the peak of
economic turmoil. Several vendors have developed analytics-based
solutions that can help issuers profitably lend to potentially risky
consumers, but for the most part, they are waiting for issuers to
decide the time is right. Mercator Advisory Group’s latest Research
Note, Innovative Strategies for Credit Card Account
Acquisition, examines how credit issuers are effectively marketing
products and originating accounts in the current economic climate.
Innovative Strategies for Credit Card
Account Acquisition

3. 2014 Mercator Advisory Group
“Large credit card issuers are almost exclusively marketing
products to prime and superprime consumers, but this can only
go on for so long as these are very saturated segments,”
comments Michael Misasi, Senior Analyst, Credit Advisory
Service at Mercator Advisory Group and the primary author of
the Note. “Financial institutions have to take on more risk to
grow their credit portfolios. The first banks that find a way to
profitably serve riskier consumer segments will have the most
opportunity for long-term growth.”
Michael Misasi
Senior Analyst
Credit Advisory Service
Mercator Advisory Group

4. 2014 Mercator Advisory Group
• Trends in household ownership of credit cards
• Trends in approval rate for credit cards for consumers of
carrying creditworthiness
• Estimated level of credit card ownership for various
credit score bands
• A discussion of the role of various banking channels for
credit account origination
• Profiles of noteworthy vendor solutions for card account
acquisition and origination
Highlights of the full report:

5. Figure 1: Payment Card Consolidation Continues as Credit
Card Ownership Continues to Decline
74%
60%
64% 63% 60%
2009 2010 2011 2012 2013
Household Ownership of
General Purpose Credit Cards
Source: Mercator Advisory Group CustomerMonitor Survey Series, Payments, 2009, 2010, 2011, 2012, 2013, Question 29
©2014 Mercator Advisory Group

6. About the Full Report
2014 Mercator Advisory Group
This report contains 10 pages and 5 exhibits.
Companies mentioned in this report include: Equifax, Experian, FICO,
FIS, PNC, Zoot, US Bank, and Wells Fargo.
Members of Mercator Advisory Group’s Credit Advisory Service have
access to these reports as well as the upcoming research for the year
ahead, presentations, analyst access, and other membership benefits.
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7. About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory
services firm exclusively focused on the payments and banking industries. We
deliver pragmatic and timely research and advice designed to help our clients
uncover the most lucrative opportunities to maximize revenue growth and
contain costs.
Our clients range from the world's largest payment issuers, acquirers,
processors, merchants and associations to leading technology providers and
investors. Mercator Advisory Group is also the publisher of the online
payments and banking news and information portal PaymentsJournal.com.
2014 Mercator Advisory Group