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Credit Card Companies Pay $200 Per New Customer

Posted By Jim On 08/10/2006 @ 3:16 pm In Credit,Personal Finance | 1 Comment

Woah… I was just reading the latest Gerri Willis columnette (she’s the top tips guru over at CNN Money) about maximizing credit card awards [3] when this little obscure (to me) fact appeared under the headline of Tools for negotiation. What’s different about this stat is that it quantifies the cost of a new customer – it’s $200. It’s a much better piece of information than the old adage that acquiring a new customer costs, on average, X times more than keeping an old one happy. (I forget how much more, like 5 or 10?)

Now what I want to know is how Gerri reached that value because a quick search in Google yielded this page that quotes the price of a new customer as $80 [4]. I scoured Citigroup’s Annual Report, hoping they’d touch on the subject, but found nothing in there about the acquisition cost of new credit card holders. I’m tempted to look elsewhere but I doubt it’ll be listed… if you happen to know of a reputable source for this data, please please please share! Thanks.

That being said, whether you believe the acquisition cost of a new credit card account is $80 or $200, it’s far less just to keep an existing customer happy. Just keep that in mind the next time your credit card company gives you any heartburn… maybe you can get that charge reversed just by asking (and reminding them that you cost $200 to acquire!).

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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/credit-card-companies-pay-200-per-new-customer.html

[3] maximizing credit card awards: http://money.cnn.com/2006/08/09/pf/saving/toptips/index.htm

[4] quotes the price of a new customer as $80: http://www.dbmarketing.com/articles/Art175.htm

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