Cost to book new credit card accounts

THOUSAND OAKS, CA (January 23, 2017) — In this year-end card metrics report, R.K. Hammer highlights their estimates for the Cost to Book a New Card Account (CPA) averaged for all channels of distribution during the past year, which separately vary widely. These costs have been continually rising as response rates have been falling, although the normal annual run rate increase has slowed to near flat lately.

Average CPA including all prescreening, marketing, credit bureau, new applicant credit risk assessment, and plastic issuance costs. The cost to book new consumer card accounts in the Hammer model was seen as:

2016: $150 (range from $66 to $280, depending upon channel)

2015: $148 (range from $60 to $300, depending upon channel)

2014: $145 (range from $55 to $310, depending upon channel)

2013: $141 (range from $50 to $300, depending upon channel)

2012: $140 (range from $50 to $390, depending upon channel)  

2017 Forecast: $155 (ranging from $70 to $275, depending upon channel)

We note that the response rate for various new applicant channels has fallen well below 1% for every year in the past decade, to as low as 0.20%, necessarily driving CPA higher.

About R.K. Hammer

R.K. Hammer is a veteran card industry advisor based in Thousand Oaks, CA, for over 30 years specializing in card portfolio valuations, second opinion valuations and card portfolio sales and purchases in over 150 card transactions, expert witness work for card issuers in litigation, card portfolio interim management, and general best practices consulting; domestic and international in 50 countries.


Bob Hammer
Founder & CEO

More News