Credit Card Acquisitions: An Intro to Introductory Offers

The U.S. adult population grew by 10% from 2016 to 2025, but credit card acquisitions advanced at a rate almost five times faster. Cardholders are not just accumulating credit cards; they increased their revolving debt in that period by more than $360 billion. Even in an unsteady economy, credit card issuers are bullish on their lending, but to attract profitable customers, they will sometimes enhance the card offer with introductory benefits. These benefits help accelerate spending, speed up account activation, and enhance the customer value proposition. 

Introductory cash bonuses and short-term 0% rates cost issuers, particularly with the recent trend in high-end credit cards but also with reward cards that use this option. Issuers can sometimes use an accounting technique to amortize the incentive cost over the anticipated card lifetime, in contrast to the immediate requirement for general card solicitation cost. This Javelin report examines the importance of this credit card accounting standard, which enables credit card issuers to fund introductory offers. It explains how accounting standards help spread their customer acquisition costs over a longer period, allowing them to extend the customer acquisition proposition.

Key questions discussed in this Credit report: 

• By how much is credit card growth outpacing adult population growth?
• How do introductory credit card offers enhance the cardholder value proposition?
• What techniques can credit card issuers use to defer the expense of credit card offers and accelerate net credit card revenue?
• Which issuers use introductory offers?
• Which issuers would benefit from an introductory-offer strategy? 

Companies Mentioned: 

American Express, Bank of America, Chase, Citi, Discover, Federal Reserve Bank, Fiserv, FIS, Galileo, Mastercard, TD Bank, Visa, Wells Fargo, Zeta