Editor’s note: Your empty mailbox may be a victim of ‘overall flattishness’

October 28, 2012

Economic data comes in many forms. There’s the big official pronouncements that emanate from Washington, on the health of the labor market or the size of the trade gap. And then there are the informal ones.

One of mine is the amount of mail I get from credit card companies, seeking my business. What once was a never-ending stream of correspondence has since been reduced to a dribble.

Richard D. Fairbank, Capital One Financial’s executive chairman and chief executive, offered one explanation. He suggested the decline might actually reflect the fact that people are just not very interested in loading up their plastic with new debt right now.

In an Oct. 18 conference call following the McLean-based company’s earnings release, Fairbank told analysts that, industry-wide, revolving credit balances are down 18 percent from pre-recession highs and that demand for new credit has “finally sort of gotten back to zero percent growth.”

Fairbank’s technical term to describe the current state of affairs: “Overall flattishness.”

That environment is apparently not very friendly to the purveyors of junk mail.

“We saw several competitors kind of do some blitzing last year and are sort of pulling back now,” Fairbank said.

“Direct mail volumes are down significantly and pretty strikingly this year, frankly,” he added, estimating the decline in volume to be 40 percent or so.

Fairbank said some competitors have responded by extending the length of teaser rates, offering zero percent for 18 months, eating into their margins, in hopes customers will bite.

For his part, Fairbank said he’ll take a flat or “stabilized” economy after the turmoil of the Great Recession.

“One thing I’ve always said is while we’d love to see a robust economy, I think we are positioned to succeed and with the choices we’re making, even if the economy, in fact, kind of doesn’t go anywhere at this point.”

Dan Beyers is the founding editor of Capital Business, The Washington Post’s go-to source for news about the region’s business community.
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