by Laura Conaway

David from St. Paul writes:

I am interested to know how many other people are still being inundated with credit card offers and even (!!) increasing credit limits without asking for them. I would love to hear if you and others are still being hit up in this climate. A couple of months ago I heard rumblings of "credit cards are next" — as in next to crumble. I was getting tons of offers then and now still. Point of reference - I am single, 25, just bought a house (30 year fixed FHA 3 percent down), and have good credit and such.

An answer, after the jump.

 

It's true that credit card defaults on the rise. But we've also heard from several of you that the offers keep pouring in.

I put the questions to Scott Talbott, chief lobbyist for the Financial Services Roundtable, who represents dozens and dozens of large banks and the major credit card providers. Talbott called around to the latter group and reported back that they've actually cut money for marketing — including fancy offers in the mail — by something like 28 percent from 2007 to 2008.

What's more, he says credit card companies are a little freaked not just by the recession, but also by new rules from the Federal Reserve that restrict their ability to change interest rates on the fly. Under the old rules, credit card folks could raise the rate if customers missed payments — they looked at those customers as newly higher risks whose credit should come at newly higher interest rates. "Because they can't respond to changes in individuals' at-risk profiles as easily, they are exercising more caution in the marketing campaign," he says.

Established customers who remain good credit risks, like David, can expect the credit card companies to keep doing what they always do — find customers and groom them.

If you're noticing a spate of offers in the mail just lately, Talbott says, that's probably a seasonal anomaly. "The budgets for credit card companies are like any company's budgets — they start up at the beginning of the calendar year," he says. "Many marketing departments spend their resources at the beginning of the year." Talbott expects marketing overall to continue its steady decline.