Despite Large Volumes of New Credit Card Accounts, High Attrition Results in Limited Gains
With U.S. credit card attrition rates at 15%, issuers need to book that amount just to keep interest-generating portfolios on par. The credit card acquisition function is the payments lifeblood, essential to grow the business and offset cardholder attrition. High rates of customer attrition require credit card issuers to adapt to a changing market.. They also must keep the credit card value proposition attractive to retain accounts.
Credit card issuers in the U.S. market booked 66.6 million new accounts in 2017, but the total volume of accounts grew by only 2.3 million because of account attrition.
The Mercator Advisory Group research report, Credit Card Acquisitions: Maximizing Results amid Change
, discusses the high volume of account attrition in the U.S., the industry trend toward digital acquisitions, and how the credit card acquisition model will shift through 2022. Mercator makes recommendations for adapting to the new realities with digital strategies, down-market underwriting, and stronger analytics to stifle attrition and build profitable revenue streams.