By T.L. Stanley

There are far easier jobs these days than marketing credit cards. With rising unemployment, sky-high gas prices and a mortgage meltdown, consumers are hardly in a spend-happy mood. Congress is grumpy, too—scrutinizing the industry like never before, and considering various bills aimed at curtailing what the Democratic majority considers unfair and even abusive business practices. High interest rates, finance charges and other fees, the legislation contends, have pushed consumers into "staggering" amounts of debt. Finally, lest we forget, it's a presidential election year, with candidates seizing on the opportunity to talk to voters—many of whom carry credit-card debt—about reform.

"It could be a tipping point," predicted Jon Swallen, svp of research at TNS Media Intelligence. "The conversations have gotten much further in Washington than in the past, and it's a definite concern to credit-card companies. If legislation changes the terms under which they do business, they'll have to figure out how to respond, react and adapt."

Cold Hard Reality
Love or hate 'em, credit cards are an integral part of American consumers' lives, to the tune of more than $2.5 trillion spent in 2007 on credit-card purchases and cash advances. More than $1 trillion of that came by way of category leader Visa, which has about a 54% market share, according to industry bible The Nilson Report.

The institutions that issue cards—Discover, Bank of America, Citigroup, Chase and Capital One account for about 80% of the business—had been reporting near record-low credit-card default rates for years, which meant that credit cards were one of the few areas of profit growth for banks. Then late '07 hit, along with rough economic times, and the value of credit-card accounts at least 30 days late rose 26% to $17.3 billion and defaults rose 18% to $961 million, according to analysts.

Even though Americans are swimming in about $900 billion in credit-card debt, credit-card lenders are holding their own, according to Nilson Report publisher David Robertson. "The industry does a fabulous job of managing risk," he said. "And there's continued growth in spending on credit cards." No. 1 card Visa forecasts annual revenue growth of 11-15% in the next three years.

Marketing Charges in Another Direction
It's not the best time to scout for new cardholders, but analysts think that Visa, No. 2 player MasterCard (29% market share), AmEx (13%) and Discover (4%) will continue to try, though perhaps on a scaled-down level. They may also work to identify underserved segments. Additionally, some companies will likely consider branding campaigns that burnish their image, an obvious attempt to offset the pr damage from hearings on the Hill.

Overall, however, the marketing focus appears to be shifting toward the retention of existing customers and to offering incentives that'll prompt holders to move a certain card to the coveted "first in wallet" slot. As has been the case with the Visa Signature card, marketers will try harder to convey special perks and benefits. Because they have a cache of know-ledge about existing customers' spending habits, they will increasingly narrowcast, tailoring offers to the specific person.

The focus, Robertson said, "is headed to an individual type of marketing. There will be outreach and rewards based on what you want and need."

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