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Reduction in BalanceTransfer OffersJuly 2020Insights 2020 Confidential & Proprietary. All Rights Reserved
Reduction in Balance Transfer OffersDirect Mail ActivityCompetiscan has observed a sharp decline in balance transfer offers extended to existing cardholders since theonset of the pandemic. Consumer direct mail observations in April 2020 were down 52%, Y/Y. The pull back waslargely widespread and observed across most major issuers. 2020 Confidential & Proprietary. All Rights Reserved2
Reduction in Balance Transfer OffersEmail ActivityBy the end of June, consumer email observations were down 84% as compared to June 2019. As many issuershalted email offers, observations during Q2 equated to just 17% of the email offers observed during Q1 2020.Email Balance Transfer Offers2020 Top Issuer Activity250200150100500JanFebChase 2020 Confidential & Proprietary. All Rights ReservedMarDiscoverAprCitibankCapital OneMayJuneOther3
Reduction in Balance Transfer OffersConsumer Point of ViewIn the 15 months leading up to the pandemic, Competiscan’s consumer panelists consistently observed balancetransfer offers at a rate of 1.8 per month. During Q2, only 26% of the typically targeted panelists observed 1 ormore offers. Below is a view of a emblematic balance transfer acquisition journey and the stark reduction inoffers targeted to this panelist.Panelist: 3742-12-06Age40-49Income 75k- 99kLocationCAGenderFemaleChaseGet a 0% Promo APR on balance transfers.Good for 12 monthsDiscoverFYI: 0% promo APR on balance transfers.Respond by 5/26/20DiscoverFYI: 0% promo APR on balance transfers.Respond by 7/7/20Direct Mail: 2020-03-16-3783Email: 2020-04-03-2176Email 2020-05-15-1487To view panelist’s complete list ofbalance transfer offers, click here. 2020 Confidential & Proprietary. All Rights Reserved4
Reduction in Balance Transfer OffersReduction in Top OffersThe reduction in mailed top offers has impacted the blended average promotional APR and duration. In April,Competiscan observed a 5% drop in the total number of 0% APR offers. The average term length also shortenedto 12.5 months as compared to 13.6, the average term just one month prior in March. This indicates both thescale back in volume as well as adjusted targeting and more conservative promotional pricing.First National Bank of Omaha is commonly observed alternating offers. In April they were observed extending a5.99% APR good for the life of the balance instead of their previous Q1 offer of 0% APR good for 12 months. 2020 Confidential & Proprietary. All Rights ReservedFirst National Bank ofOmaha0% APR until January 2021when you use these checksFirst National Bank ofOmaha0% APR until January 2021when you use these checksFirst National Bank ofOmaha5.99% APR Fixed for Lifewhen checks post by May 15
Reduction in Balance Transfer OffersImpact to Competitive LandscapeCompetiscan anticipates balance transfer offers will remain at lower levels in Q3 as compared to historicalactivity, but given the demand and prime seasonal window, a re-emergence is likely.Recently, KeyBank released a 0% balance transfer email alluding to checks being on the way. Discover andCitibank also were observed with mailed offers in June.KeyBankYour 0% Promotional APR is available nowDiscoverYou qualify for this special balance transferofferCitibankWe're here to help simplify your 505 2020 Confidential & Proprietary. All Rights Reserved6
Reduction in Balance Transfer OffersImpact to Competitive LandscapeWhile adjusted strategies for balance transfer offers and tighter targeting are necessary steps for issuers tomitigate risk during times of economic downturn, this also leaves the door open for other debt consolidationcompanies and lending offers to fill the gap for consumer demand.LendingClub recently used a testimonial depicting the current times of increased layoffs and that their personalloan assisted this member with paying off credit cards and consolidating debt during a critical time of need.LendingClubWe're Here for Our MembersMarcus by Goldman SachsPay off higher-interest credit card balances,home improvements, and moreProsperPut an end to revolving credit card 902 2020 Confidential & Proprietary. All Rights Reserved7
Follow Us:LinkedIn: CompetiscanInsightsCompetiscan Research & mpetiscan.comTwitter: @CompetiscanInstagram: @CompetiscanCompetiscan LLC CONFIDENTIAL. ALL RIGHTS RESERVEDThe ideas, concepts and information contained in this document, and the manner in which thisinformation is presented, are proprietary trade secrets owned by Competiscan LLC and maynot be used or duplicated without authorization. The reading of this document constitutes anagreement with the foregoing and an understanding to be bound by its terms and conditions.July 2020Reproduction or disclosure of these materials in whole or in part without the prior writtenapproval of Competiscan LLC is expressly prohibited by law. 2020 Confidential & Proprietary. All Rights Reserved
Competiscan has observed a sharp decline in balance transfer offers extended to existing cardholders since the onset of the pandemic. Consumer direct mail observations in April 2020 were down 52%, Y/Y. The pull back was . Chase Get a 0% Promo APR on balance transfers. Good for 12 months Discover FYI: 0% promo APR on balance transfers.
