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New Cardholder Acquisition and Engagement: Lessons from Top Canadian Card Monolines

New Cardholder Acquisition and Engagement: Lessons from Top Canadian Card Monolines

All references herein are based on Equifax Canada Data

Just a few years ago, the Big 5 Banks were far ahead of the top Canadian Card Monolines with new account acquisitions. The Big 5 were also on top of their Activations and Early-Month-On-Book Strategy which translated into a relatively low proportion of new inactive accounts when compared to other card issuers. Today, and for the first time since the Costco Portfolio switch from Amex to CapOne, Monolines are leading the market with new credit card account acquisitions as well as relatively high activation rates.

For example, in Q3 2017, the share of new accounts for Top 5 Monolines reached the Big 5 Banks levels (at 43% of the new account acquisitions respectively). Today, as of Q3 2018, Top 5 Monolines managed to up their game by 3% and are now at 46% of the acquisitions share, while Big 5 Banks are lagging behind at 42% of the new acquisitions. In Q3 2013, the proportion of Big 5 Bank’s new inactive accounts averaged at around 27%. Similarly, the average proportion of new inactive accounts for top Canadian Monolines was around 38%. If we look at the data today, we notice a significant difference. The average proportion of inactive accounts has slightly improved for the Big 5 and reduced from 27% to 25% (or 75% activation rate). At the same time, it looks like Monolines have discovered a secret recipe! The proportion of New Inactive Accounts for Monolines has significantly decreased (by as much as 17%) and is now sitting at 21% as of Q3 2018 (or 79% activation rate).  

So how did they do it? There are a number of factors that could be attributed to this recent success for Monolines, including changes to the economy, industry events, and specifics of their targeted marketing strategies.



The increase in the Bank of Canada’s overnight rate (now standing at 1.75% vs. 0.5% in 2016) and the resulting increase in mortgage rates have created some level of debt stress for Canadian consumers. Since Q3 of last year, the Canadian Active Credit Card Balances have increased by 5.5% to $94.2 Billion (based on Q3, 2018 results), while the number of Active Credit Card Accounts remained relatively static and have only increased by 1.2% to approximately 40.8 Million Accounts. Cardholders have started seeking more credit while putting more everyday purchases on their credit cards. Right around the time of the interest rate increases, many Canadian Monolines launched new products that reward everyday spending. For example, Amex introduced its Cobalt Card, Canadian Tire introduced its Triangle Cards, and PC Financial teamed up with Esso to offer more benefits to its cardholders. It might well be the case that these new offerings were in the right place at the right time and appealed to the needs of financially stressed consumers. 


Industry Events

A second factor that may have contributed to Monolines success in 2018 could be the recent industry events related to the Aeroplan program. From the time AirCanada announced its intent to part ways with the Aeroplan program in May 2017, most card issuers that play in the premium traveler space increased their new account acquisition efforts, as well as some Canadian Monolines.  The uncertainty about the faith of Aeroplan Credit Card portfolios in the market served as a favorable boost to new cardholder acquisition initiatives. Some Monolines were smart to take advantage of this situation to up their acquisition efforts.


Marketing strategies

A third factor that may have contributed to the success of Monolines is their marketing strategy as it relates to target market selection. In comparison to the Big Banks, Monolines seem more willing to assume risk when it comes to new account acquisitions. Therefore, they tend to acquire more accounts in the lower risk score bands. Additionally, given the types of products that Monolines issuers are in market with, on average, their books of newly acquired accounts are more skewed towards “older” groups of the population compared to the Big Banks. For example in Q3 2018, the proportion of new accounts with primary cardholders under 35 years for top monolines was around 27%, while the same was 48% for the Big 5 Banks. The population that is over 35 years old is more likely to own a home and to have a mortgage. Additionally, the lower risk score may mean that these cardholders are more likely to fall under financial stress and, as noted before, to increase their credit card spend with the recent interest rate increases.

There are many potential factors that could have contributed to increases in new cardholder acquisitions and subsequent cardholder engagement for Canadian Monolines. Some Monolines appeared to be right on time with new products that appealed to the needs of the target population, and some took advantage of market uncertainties. A lesson to be learned from this is it’s very important to constantly review and adjust your marketing strategy as well as your target market based on what is happening in the economy and in the industry. Proper marketing tools that leverage real-time data are critical for successful acquisition and customer engagement.


Ready to learn more about how Equifax can help you stay on top of the market with real-time Data Driven Credit Card Marketing Solutions? Click here to contact your Equifax Canada representative today!


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About the Author

Anna is a Director, FI Credit Card Strategy and Innovation at Equifax Canada. After graduating with an MBA degree from Schulich School of Business, Anna held a variety of roles within the Financial Services Industry. For the larger part of her 10+ years career, Anna’s professional interests have revolved around the Credit Card Industry, where she continues to focus her research as part of her present role at Equifax.

Profile Photo of Anna Voinovskaia