Citibank will be pulling some 14 credit cards out of the CardOffers.com affiliate marketing channel, according to a source who is impacted by Citibank's decision. CardOffers.com is one of the largest credit-card affiliate networks on the Internet. Citibank said its move is "due to the state of the market." The departure, which impacts all of CardOffers.com's partners, is effective December 31, 2008.
Citibank is just the latest credit-card company to exit the online affiliate market. Last month, Chase said that it would exit the affiliate marketing channel as well, citing "current market conditions." Given the credit climate, and given the state of Citibank's credit-card business in particular, the move to exit the CardOffers.com channel should not come as a surprise. If there is a surprise, it's that Citibank didn't pull all of its offerings out of the channel. As it stands, Citibank is leaving five of its cards in place. The Citi Platinum Select MasterCard, Citi CashReturns MasterCard, Citi Diamond Preferred Rewards Card, Citi PremierPass Elite, and Citi mtvu Platinum Select Card for college students are unaffected by Citibank's announcement.
These are the 14 credit cards that are affected by the move:
Last month when Chase announced that it would be leaving the channel, a move that was effective immediately, I figured that it was an isolated event -- something specific to Chase. However, now that Citibank has decided to take a good portion of its affiliate portfolio out of the channel as well, I think this could be the beginning of a trend. Chase and Citibank, if I am correct, will be seen as first movers.
Citibank's departure does two things. One, it will reduce costs at Citibank's card unit. There is a cost associated with "boarding" new customers. Indeed, affiliates, for example, get a commission for every applicant who successfully turns into a customer. What's more, many of the affiliate offers also come with nice teaser promos. You'll find fewer of those on credit-card company sites. That should result in a cost reduction for Citibank as well. In addition to driving costs down, Citibank will effectively be slowing loan growth as well. Indeed, fewer applications coming from the affiliate channel means less lending overall. In the meantime, Citibank will continue to market credit cards from its own Web site.
Last month when I wrote my piece on Chase's exit (story link here), I said this: "I'll be keeping my ears and eyes open for further developments." Let's just say that Citibank's move, coupled with Chase's move last month, has my attention. This is a further development. And it bears watching.
On Sunday, Meredith Whitney, a banking analyst at Oppenheimer, said that credit card companies would rein in some $2 trillion in credit lines during the next 18 months (story link here). Whitney said the cuts will be made in "reaction to risk aversion, constrained capital and regulatory change."
Make no mistake, these recent departures from the affiliate marketing channel represent a desire to do less lending. I think we can tie some of it to the same stuff that Whitney cited in her op-ed piece: a reaction to risk aversion, constrained capital and regulatory change.
All I can say is stay tuned. I am sure there is more to come.
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Thursday, December 4, 2008
Citibank Pulling A Large Number Of Its Credit Cards Out Of The Affiliate Marketing Channel
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15 comments:
The game is getting tougher every day :-(
Indeed, it is. I thought I'd at least get a "game changer" from you. Ha!
Game Changed!
Dang it Bob! That was way too easy!
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Anybody want to recite the Ten Little Soldier Boys/Indians poem from "And Then There Were None" (Agatha Christie)?
Bonus points if you can find 10 creditors to match the soldier boys!
We'll need to get Vibe in on this.
So what (if anything) happens to current AT&T Universal card holders? Anything?
CM, throwing this here while I wait for your GM bailout article (hint hint). Staggering to see this morning that GMAC financed a lowly 2% of all sales last month. How can GM survive? Wait until people realize just to buy a GM you need to have multiple lenders pulling hard inquiries...
Hanadarko, nothing happens to AT&T customers.
This article pertains to affiliates that advertise these cards on their sites. Visitors to those sites will no longer be able to apply for those cards. If you want to apply, you'll have to go to Citibank's Web site.
This article does not pertain to anything else.
Green, is that amazing?? GMAC financed just 2% of sales last month. Shaking my head here.
Multiple pulls will be the result. GMAC will have to shop these loans around until someone bites. Hello 10 credit pulls. Hopefully they are coded correctly on the credit report.
Ahahaha. Oh CM you crack me up. "Hopefully they are coded correctly"
Unlikely
You are my number one cynic, Lion. Ha!
I've been a huge credit affiliate for a few years now and I just wanted to get more information on the affiliate channels.
First off, I want to say that you have a wonderful blog and I've enjoyed a few posts so far.
With that said, I just want to give you another heads up. Citi Bank is going to be dropping down to three active cards in mid-January. Bank of America is dropping out 100% as well as a smaller company called FIA (they only had a few cards on the network)
Many people that I have talked to expect to see the affiliate channel hurting until at least Summer of 2009. Hope that helps you out a little.
Anon, thanks.
FIA is a BOA subsidiary. They handle the credit-card operations for BOA. FIA is essentially the old MBNA.
Interesting on the Citibank stuff.
Glad you're enjoying the site. If you ever have a tip, feel free to email me at plastic101 @ gmail.com.
so is there anyplace to get citibank offers besides cardoffers?
There just aren't that many offers for Citibank out there (including at Cardoffers). But Creditcards.com and Credit.com offer a couple too. But they're the same ones that cardoffers, er, offers.
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