Let's play word association. If I say "addressing risk", "volume", "manage their portfolios", and "following the trend", what do you think of? Mutual Funds, ETFs, Hedge Funds?

How about credit cards?

Check out this snip from Marketwatch:

If your mailbox is overflowing with pre-approved credit-card offers, you're not alone. Card issuers mailed more than 6 billion offers in 2005, a record number... according to a new report by Synovate, a market research firm. American Express drove a big part of the rise in mailings, increasing its direct-mail volume by 56% in 2005, while regional credit-card issuer Columbus Bank and Trust increased its volume by 205%, according to the report. The average response rate for the industry was 0.3% in 2005, down from 2.2% in 1993, when the industry mailed about 1.5 billion offers to consumers, according to Synovate.

The article goes on to discuss possible causes for the increase. The verdict is that credit card companies are reacting to increasing interest rates such to increase the number of variable rate vs. fixed rate card holders. They are making efforts to balance their portfolios and this is one way to do it. Just like in 2002 when bankruptcies increased and mailings decrease as they were criticized for their excessively risky portfolios.

I think it's interesting to hear about the mailings in those terms. It makes you realize that credit cards are a business and the owners of those businesses want to make profit. They make it on the backs of consumers who are all too eager to spend more than they can afford. With a negative savings rate again this quarter it's worth evaluating your credit position in these terms. Are your profits becoming someone else's? Stop charging if you can't afford it!

You can use this site to opt out from the pre-approved offers in your mail. It's quick and easy and it may help you keep your discipline.mortgage calculator