We're about to close out one year and start another, and for the most part, things are looking pretty good for the card industry.
  Charge volume is up by double digits, with debit cards leading the way. And while economists warn that consumer credit quality could take a turn for the worse at any time (see our annual Outlook story on page 14), credit card issuers at the moment are enjoying decreasing chargeoffs. Payment rates are at record levels, in the 17% range, which reduces card issuers' interest income but at the same time lessens consumers' debt burdens that are the subject of so much tribulation lately.
  And with President George W. Bush having been re-elected and Republicans adding to their majorities in both the House and Senate, the long-stalled bankruptcy bill might actually make some progress. If so, however, I sure hope Congress fixes its many significant flaws.
  Meanwhile, consumers will have more card choices than ever in 2005 now that the Supreme Court has let stand lower-court decisions striking down Visa and MasterCard rules banning U.S. members from issuing American Express and Discover cards. MBNA Corp., American Express Co.'s first such partner, already has 300,000 cards out to members of more than 1,000 affinity groups (Card Watch, page 11). The most obvious losers in the recast card game are the bank card associations, which are likely to see some market-share erosion.
  Probably more significant, however, is the effect such cards could have on merchants. AmEx and MBNA argue their card partnership is aimed at high-spending, affluent customers. But since AmEx-branded cards carry higher discount rates than bank cards do, merchants may well conclude that the added acceptance costs will negate profits from additional sales volume. We're not going to know the answer until millions more such cards get into circulation.
  MBNA and AmEx already are cranking out loads of direct-mail solicitations to support their new partnership, helping to make 2004 a likely record year for card mailings. And that leads me to my final point, the "mini-investigation" I promised in August after my neighbor told me she mails back unsigned card solicitations in the business-reply envelope as a way of protesting junk mail. Is such activity widespread, I wondered?
  Doesn't sound like much. Here's what card marketing consultant Jim Accomando, who besides MasterCard has worked for GE Capital and two other lenders, has to say on the matter: "It's probably something that's not even measurable. It's very minor."
  Ruvan Cohen, senior vice president of MasterCard International's MasterCard Advisors, reports that when he worked at Citibank, some people would mail heavy objects, including chunks of brick, in the postage-paid envelopes from card solicitations. "Cardholders would try to find a way to send these things back to us, incurring expense at our end," he told my freelance writer, Kate Fitzgerald. "But it wasn't a huge problem."
  There you have it. But if somehow protests via mail begin catching on, I promise to keep you informed.

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