Credit card companies tout holiday promotions

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With retail forecasts predicting a blue Christmas, credit card companies want to whip consumers into the holiday spirit with promotions.

The two top cards, Visa USA and MasterCard International, will both run contest promotions for the holidays, while rival Discover Card will sponsor charitable organizations and holiday celebrations in key markets, such as New Year's Eve in New York's Times Square. And all the top credit card companies will continue their attack on the e-tail marketplace with special offers, online ads and promotions with online merchants.


Retail forecasts call for a slow holiday season, as consumer spending is on the wane. The Conference Board sounded a note of caution in October, when it noted a sharp decline in its Consumer Confidence Index, a change it credited to the cooling economy and high oil prices.

In its poll of 5,000 households, the Conference Board found the number of consumers who expected business conditions to improve in the next six months dropped to 16.5% from 19% in September and those expecting conditions to get worse rose to 7.2% from 5.6%.

Strong consumer spending has pushed credit card companies' volume up year after year during this economic boom cycle, according to figures from industry newsletter The Nilson Report. Total U.S. credit and debit card volume for the top five cards alone -- Visa, MasterCard, American Express, Discover and Diners Club -- rose 15.9% in 1999 to $1.34 trillion in purchases, itself a faster growth rate than 1998, which was 14.7% over 1997. This year seems poised to do even better than 1999, with $736 billion in volume in the first six months of 2000 alone, according to Nilson numbers.

But much will depend on retail volumes for the holidays, when consumers use their plastic heavily for presents, travel and other seasonal expenses. The fourth quarter is a key period for credit cards, said Elizabeth Silver, senior VP-advertising at Visa, noting that the last quarter accounts for more than 40% of Visa's annual volume.

"It's a critically important time because they want to get usage up [and] this is the time when people buy things," said Charles Wendel, president of Financial Institutions Consulting.

Not only do the holidays encourage usage, but purchases tend to be the ones consumers plan to pay back over a few months, which racks up significant finance charges for the card companies, Mr. Wendel said.

"If you're ever likely to use financing, it's in the Christmas season, because it's when people overextend," he said.

MasterCard broke ads on Oct. 23 to promote a sweepstakes promotion, "A Home for the Holidays," giving away $250,000 toward a new home and other prizes to cardholders who use their MasterCard through yearend. The contest is being promoted with TV spots and online at


The sweepstakes spot, from McCann-Erickson Worldwide, New York, continues the "Priceless" campaign theme with a father picking up his son from a sleepover in the middle of the night. After listing all the prices of the sleepover items -- backpack, sleeping bag and flashlight -- it adds "Going home: Priceless."

Visa also plans to perk up the holidays with a contest giveaway, this one a tie-in to the holiday release of the film "How the Grinch Stole Christmas." The promotion, "Visa & the Grinch Give Back the Holidays," enters cardholders into a contest to pay off their holiday purchases every time they charge.

The promotion, handled by Frankel, Chicago, will be backed by TV and print ads from BBDO Worldwide, New York, as well as outdoor, in-store displays, online marketing and direct mail. The campaign will break this month with TV ads promoting Visa as "The official card of Whoville" and will include 75 million statement inserts, 4 million pieces of point-of-purchase signage and an area dedicated to the tie-in within the card's Web site (

"When we find we have a property that's interesting to us, we leverage it," Ms. Silver said. "The appeal of this movie . . . it was just too much to resist."

American Express Co. will not have specific holiday promotions, but it will step up marketing activity to encourage card use during the holidays, said a company spokeswoman. The marketer will promote heavily all its products during the season and will also stress special offers such as holiday specials in its Membership Rewards loyalty program and mailings with exclusive offers for cardmembers.


American Express has devoted much of its marketing muscle over the last year to the launch of its Blue "smart card" in September 1999. That has reaped Blue 5.5 million accounts in its first year and $7 billion in balance transfers from other cards, according to results of a study by Brittain Associates, a market research company.

"To have more than 5 million cards in a year is a real success story," said Bruce Brittain, president.

While the other cards try to reach consumers were they live, Discover Financial Services will hit the streets, sponsoring several key holiday events around the country. The company, which has been a sponsor of Times Square's New Year's Eve celebration since 1998, unveiled a new sign Nov. 1 on One Times Square, the site of the annual ball drop seen worldwide. The sign will display information on Discover Card promotions, activities and online products and services from its site (


BBDO is also working on a spot breaking this month to continue Visa's annual tradition of promoting Internet merchants in its fourth-quarter ads. This year,, the e-commerce site of The Gap, will be featured in Visa's "It's Everywhere You Want to Be" campaign, which has featured e-tailers Etoys and in past holiday seasons. Holiday print ads in consumer magazines will feature e-tailers,, and

"We realize the fourth quarter is very important for a lot of our partners," said Ms. Silver. "It's a great way to remind people Visa is the online currency."

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