Now comes NerdWallet, a competitor, that filed an IPO in late September.
This recent report by MediaLogic calls out Capital One’s constant envelope testing, and American Express’ sensory strategy to keep you interested enough to look inside.Īll this, just so credit card issuers can give you 2% cashback when you use their card.Įnter the credit card aggregators. PaymentsJournal first covered this space in 2018 when we looked at Credit Karma and noted: “Credit Karma is one of the large ones can you believe $4 billion valuation and $680 million in referral fees from lenders?” Later, Intuit acquired Credit Karma for $7 billion.Ĭredit Karma was a storybook American success story: “Kenneth moved to Las Vegas with his family from China at age four, where his mother was a casino dealer, and his father was a cook. Years later, at Boston University, where he double majored in economics and math, he worked his way through school parking cars at a night club.” It takes rewards, digital engagement, and persistence. With mail response rates measured in basis points, not percentage points, it is no wonder that credit card issuers spend millions just to design the envelopes used in direct mail. New accounts are the lifeblood of a credit card business. Issuers must constantly book accounts to fuel growth and cover account attrition. Top banks, like BoA, Chase, and Citi, must source 25 million or so new accounts to cover those customers that leave voluntarily or due to collection issues that is just 5% of the 500 million active credit card accounts in the U.S. And do not forget business growth requirements. Tack on another 7% for a robust year, and it is easy to see why issuers scramble to capture new accounts.
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