Banks, in search of their next generation of affluent lifelong customers, have taken the credit card sign-up tables that used to speckle college campuses on football Saturdays in the fall onto the Internet. Now, instead of trading an application for a t-shirt, college students can interact with financial companies on their favorite social media websites, often with real monetary perks involved.
This shift in approach was a long time coming, but it took something of a credit card marketing perfect storm to fully materialize. While the credit card industry had been rife with anti-consumer tactics for some time, it wasn’t until the height of the Great Recession that a law improving transparency in the credit card market and beefing up consumer rights was passed. This brought to a close the era of on-campus credit card marketing that insulated students from competing offers.
Meanwhile, social media was rocketing toward ubiquity. By 2010, nearly 90 percent of people aged 19-28 were using social media websites, and by 2011, Facebook amassed roughly 640 million registered users, according to the Search Engine Journal.
Also, in the last 10 years, banks have seen the effectiveness of their direct mail offers decline by roughly 90 percent.
In other words, the stage was perfectly set for banks to get social with their marketing efforts, and they’ve certainly responded. The following are among the notable social media initiatives launched by major credit card issuers in the last couple of years in the hopes of roping in people with college educations and high earning potential who will soon also be in the market for bank accounts, mortgages, and more:
- Facebook Giveaways – Chase has given away a $1 million cash prize and $1,000 Amazon.com gift cards through Facebook “Like” contests.
- Social Media Deals – American Express’ “Link, Like, Love” program enables cardholders to link their credit cards to their Facebook accounts, claim deals advertised on the site, and then automatically receive discounts when making corresponding purchases.
- Point Sharing – By now most of us have seen the Citi commercials in which townsfolk use their collective points to throw a huge Olympics viewing party or take a trip to the Games. Don’t worry though, you can still pool rewards even though the closing ceremonies in London are long past.
- Virtual Rewards – American Express and the online gaming company Zynga teamed up to offer a Farmville Prepaid Card, which allows you to earn virtual game credits on real-life purchases. Discover is also giving consumers who sign up for cards through Farmville $100 in Farm Cash.
- Affinity Cards – Chase also launched a LivingSocial Credit Card that allows you to earn extra rewards on LivingSocial purchases.
The truth is these initiatives merely represent credit card companies’ testing of the social media waters. It’s only fair to expect their efforts to intensify moving forward and the current personal finance landscape to significantly change as mobile wallet technology goes mainstream and people stop responding to direct mail offers altogether.