什么是 Pre-Approved Credit Card Offers
Pre-Approved Credit Card Offers 其实就是你平时在邮箱收到的一些邮件，告诉你，你可以申请这张信用卡的邮件。对一些人有用，也对一些人无用。
People do not write personal letters as they did in the past. Opening your mailbox is not as fun anymore. Now, all we get are bills and untargeted direct mail. Getting pre-approved credit card offers in the mail is actually exciting by comparison! The offers open a world of opportunity – if you get them.
Which prompts people to wonder how to receive pre-approved credit card offers in the mail. People with moderate risk profiles get most preapproved offers. There are three reasons why this is true.
- Demonstrate that you will not cause losses
- Show that you will generate revenues
- Indicate that you will respond
Preapproved Card Offers for Moderate Risks
The first factor in getting more pre-approved credit card offers in the mail is maintaining a moderate risk profile. Your generic risk score should be good, but does not have to be great.
Banks will not send offers to people who are likely to borrow money, and never pay it back. People with low risk scores and delinquent histories are far more likely to become seriously delinquent, or default on new loans.
Bad Risks Screened Out
It costs banks money to send offers in the mail. There is the cost of paper, envelopes, printing, and postage. Banks will always check your consumer report prior to approving you for any loan. The preapproval process works by applying the banks underwriting criteria to your consumer report before sending out the offers.
The banks weed out people with poor histories at the consumer-reporting agency. The bank saves money by not mailing offers to people they know they will never approve for a loan.
Preapproved Card Offers for Revenue Generators
The second factor in receiving more preapproved credit card offers in the mail is showing that you will generate revenues. The banks are in business to generate profits by lending money.
They earn profits when their lending revenues exceed customer acquisition costs, and loan losses. Credit card lending revenues come from three primary sources: interest charges, interchange fees, and late fees.
Interest Revenues
Banks send preapproved credit cards offers to likely revolvers. Customers who revolve their balance pay interest, and generate revenues for the bank. However, the consumer reporting agencies cannot distinguish between revolvers and transactional users. Transactional users pay the balance in full every month, and pay no interest. The banks simply report the balance and the account limit at the end of every billing cycle.
Banks utilize revenue models to predict which prospective cardholders are most likely to revolve a balance, and pay interest. Those tending to score highest on these models are people with large card balances, and high utilization ratios. Keep in mind these factors tend to suppress your risk score. That is the second reason why people with moderate risk scores get the most preapproved offers.
Interchange Revenues
The banks also earn revenues every time an account holder charges a purchase. The merchant pays an interchange fee that is split between the company approving the transaction, the card association (Visa, MasterCard, etc.), and the issuing bank. People, who charge more on their card, generate higher interchange revenues.
Once again, the consumer reporting agencies cannot determine the level of spending on cards. They have visibility to only the balance at the end of the billing period, and the limit.
People who are active members of frequent traveler programs tend to charge more on their cards. Travelers often use their cards to book flights, hotels, and rental cards. Rewards members with high utilization tend to receive more preapproved credit card offers in the mail because of the projected spending.
Late Fees
Late fees are the third way that banks generate revenues. A prospective customer who is occasionally thirty days late may generate late fee revenues, while still having a low risk of charge off.
Frequent travelers often exhibit this behavior, as bill paying is more difficult while on the road. A person with a history of being thirty days late, but never worse, may receive more offers. Of course, this only holds if their risk scores stays in the moderate range.
Likely Responders Get More Preapproved Offers
Response rates for preapproved credit card offers are very low. The average mailing yields a response rate of about one percent. That means that ninety-nine percent of the offers are wasted. The banks paid for envelopes, paper, printing, and postage, and ninety-nine percent of the investment yielded nothing.
Banks rely heavily on response models to predict which population segments will respond best to certain offers, and increase the number of responders per thousand mailed. They target those segments most likely to respond, provided they meet the risk criteria as well. The same consumer reporting agency data used to weed out people with poor risk profiles, are also used to as input to the response scores.
Moderate Risks Again
People with very good or excellent risk profiles rarely respond to offers for new loans. They tend to rank at the bottom of the response model scores. Most banks will mail offers to people in the top twenty percent of the response scores.
The factors driving top response scores are the number of inquiries, number of newly opened accounts, total revolving balances, and utilization percentages. These factors also tend to lower risk scores, which is the third reason why people with moderate risk profiles receive more preapproved credit card offers in the mail.
Direct Mail Responsiveness
Direct mail responsiveness it the final factor determining who get preapproved credit card offers. Many consumer like getting offers in the mail, and respond regularly. Others dislike the offers, toss them immediately in the trash, and may opt out of direct mail altogether. Banks want to market through channels that prospects prefer.
Many data mining companies compile direct mail responsiveness profiles for individuals and households. For example, people who regularly order from print catalogues are tagged as direct mail responsive. These data sometimes use as input into response models.
There you have it; four ways to receive more preapproved credit card offers in the mail!