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Not only did direct mail card offers continue their slide in 2008, more of the ones that hit consumers’ mailboxes carried annual fees, according to Synovate, a market research firm based in Chicago.Synovate manages Mail Monitor, a program that measures the flow of card offers through the mail as well as responses to those card offers. The program has tracked the steady decline in direct mail card offers, once the card industry’s most often used marketing approach.During the first quarter of 2009, U.S. households received 372.4 million offers, representing a dramatic 67% drop from the 1131.6 million, offers received during the same period last year, the firm reported. Roughly 27% of the card offers during the first three months of this year carried annual fees, up from 18% one year ago.“As issuers continue to cut back offers, and the mailbox becomes more super-prime, we are seeing a proportionately higher number of card offers with an annual fee,” said Andrew Davidson, vice president of competitive tracking services for Synovate’s Financial Services Group.Fee-based cards now reflect an increasing proportion of both reward/rebate and nonreward/rebate card solicitations. In addition, 42% of nonreward/rebate offers carried an annual fee versus 19% in the prior year.“Many issuers have scaled back significantly and some have been relying more on proven co-branded airline programs, which typically carry an annual fee. At the same time, the mass exodus from the subprime space means issuers with fee-based models, such as First Premier, are becoming more dominant in the category,” said Davidson. “There is a great deal of speculation as to what the credit card industry will look like once the Credit Cardholders Bill of Rights comes into effect, but while the majority of offers continue to carry no fee, we may already be moving in the direction of a fee-based model.”According to Mail Monitor, cardholders who currently own a fee-based card typically own multiple cards but have just one fee-based card in their wallet. The fee-based card is also the card that tends to be used most often.“If this trend continues, the battle for share of wallet will intensify,” predicted Davidson. “In a fee-based environment, consumers will be more likely to own just one or two credit cards and will not have the appetite for the level of multiple-card ownership that has fueled the growth of the industry in recent years.”–[email protected]

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