Due to the intense competition among issuers, the trend for the industry has been higher credit and account acquisition costs. Aggressive mass marketing campaigns have been the major cause of increasing credit costs. This has made it difficult for most issuers to reduce expenses and maintain high profit margins. Not only are these campaigns costly, it seems that card holders are reluctant to switch card issuers based on these advertisements. This demonstrates how ineffective the massive marketing campaigns have been.
People appear to be satisfied sticking with the larger card issuers despite the higher rates.
The following graph displays the credit costs of five industry leaders compared to the industry average for 1995 and June 96. The graph is displaying the trend of increasing credit costs, however, that isn't the only trend it is showing. The companies being compared in the graph are all market leaders. Even though their credit costs are increasing, they are still well below the industry average. This is a result of consumers reluctance to switch to lesser know discount issuers.