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Data for today’s episode is provided by Mercator Advisory Group’s report – Secured Cards: Five Reasons Credit Card Issuers Should Serve This Market.
Three methods to approach the $2 billion Secured Card market
- Counteroffer on declines
- Convert prepaid programs
- 3) Target specific segments
- Counteroffer Declines: After a bank turns a client down for credit, follow up with secured card messaging
- Prepaid conversion: Lean heavily on the messaging that credit cards offer greater Federal protections than prepaid
- Target Segments: The key benefit is consumers can build/repair their credit score with secured cards
- In 2011, there were 1.5 million secured credit card accounts; by 2023, >6 million
- In 2011, secured credit cards carried $500 mm in revolving debt; by 2023 >$6 billion
About Report
Mainstream programs add deposits and create a feeder group for general-purpose credit cards.
While most credit card issuers chase mass-affluent consumers and those with 700+ FICO Scores, a downstream secured card issuance program with a progression plan for advancing cardholders from secured to unsecured account status can be a strategic advantage.