Three Things We’re Hearing
- Younger consumers more likely to switch primary banks
- Personal loan mail volume plateaus
- Large...
Three Things We’re Hearing
- Premium cards move to lifestyle marketing
- Boost your credit lines — your CFO will thank you!!!
- Personal loan and card demand spike!
A four-minute read
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Premium Cards Move Toward Lifestyle Marketing
- The March Epic Report noted the increase in marketing activity for premium travel cards
- Premium travel card marketing messages have changed over time, recently focusing less on rewards and customization and more on travel benefits such as lounge access and lifestyle-focused merchant credits
- Leading super-premium issuer American Express announced enhancements to the Platinum Card in September, which followed Chase’s Sapphire Reserve card upgrades rolled out earlier in June
- The Amex Platinum Card refresh added several new and enhanced merchant and lifestyle benefits worth $3,500 to the Platinum Card to justify raising the annual fee from $695 to $895, such as:
- New credits on Resy, Uber One, lululemon, and Oura, and Premium Leaders Club hotel status
- Enhanced digital credits as well as privileges at The Hotel Collection
- Platinum ad spending was skewed towards these lifestyle credits rather than additional rewards points
- On the day of the launch, American Express used its Instagram page to promote the card and its aspirational new tagline, "There's Nothing Like Platinum."
- After teasing the Platinum refresh in early summer, search traffic surged when the details were announced on September 18th
- Chase earlier added additional travel and lifestyle benefits to the Chase Sapphire Reserve card claiming over $2,700 in annual value while raising its annual fee from $550 to $795, including:
- Hotel credits at Edit and select Chase Travel hotels and IHG One Rewards Platinum Elite Status
- Dining credits with OpenTable
- Statement credits with StubHub, Apple TV+, Peloton, and Lyft
- While rewards remain a central benefit for these cards, issuers continue to add lifestyle benefits that are less expensive for them and often funded by the merchants
Boost Your Credit Lines — Your CFO will Thank You!!!
- Credit card credit lines in the U.S. have increased only modestly in recent years, falling behind the rapid rise in prices
- While consumer prices climbed about 20% from 2019 to 2023, average credit card limits barely kept pace, with TransUnion data showing the average new credit card line was around $5,214 in late 2019 and only about $5,702 by late 2024 — a roughly 10% nominal increase over five years
- Many cardholders lost purchasing power on their existing credit lines as inflation rose 21% during the same period
- As a result of credit card issuers exercising restraint with conservative new originations and restrictive credit limit management on existing credit card customers in the same timeframe, our analysis has found consumers’ available credit has not kept up with demand
- The change in credit limits has not kept pace with the growth in balances
- Even as demand for credit grew post-pandemic, banks often held back as according to the New York Fed; in 2024, the rejection rate for consumer-initiated credit limit increases jumped to 38.9%, up from 30.9% a year prior
- As noted in the July Epic Report, consumers are sensitive to credit limits, with 27% listing “credit limit high enough” as a reason for choosing their primary card
- We have conducted many existing customer marketing programs over the years targeting increased card member profitability
- Most such programs (e.g., spend and get, merchandise tie-ins, rate sales) do little to move the needle more than a few percentages
- Credit line increase programs are by far the most powerful way to increase profitable balances without raising operating expense
- FICO reported that well-executed credit line increase programs have led to a 15% surge in monthly card spending and a 129% jump in expected profits on those accounts
- Risk managers are often hesitant to aggressively increase credit lines, often for fear of “tipping” otherwise creditworthy cardmembers into delinquency (a phenomenon over the years we have seen to be a myth)
- A properly targeted test can prove that “good” balances can be increased without an overall rise in losses
- It is easy to test your way into a profitable credit line increase program without risking substantial increase in losses by first starting with a small sample, then rolling out the strategy after it has been proven profitable
Credit Card and Personal Loan Demand Spike!
- Credit card and personal loan mail volume are modestly ahead of 2024 volumes year-to-date
- After lagging the “supply” of new solicitations for over a year, “demand” for credit cards and personal loans has surged in recent months
- Sofi has dominated personal loan mail in ’25, with Capital One/Discover and Citi overtaking the leading fintech mailers
- Capital One/Discover and Citi prime credit products also dominated August mail volume
- JPMorgan Chase will re-enter the HELOC market after a five-year absence (perhaps they read the July Epic Report???), a market left wide open with top mailer Discover’s recent exit
- Affirm’s recent earnings report showed continued momentum with strong growth in gross merchandise volume — up 43% year-over-year to $10.4 billion
- Active consumers increased 24% to 23 million
- Transactions per active customer grew 19%
- The number of active merchants jumped 24%
- Klarna and Affirm, who seem to be distancing themselves from other pure-play BNPL providers, have recently announced that they will be available for in-store payments via Apple Pay in the US and the UK
Thank you for reading.
Jim Stewart and Ben Brake
www.epicresearch.net
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