Spring is here! With it comes the promise of rebirth and renewal – and a renewed urgency to offer your members credit card accounts before your competitors beat you to the punch. There’s a reawakening in the credit card industry that has banks and credit card companies courting your most profitable members with new card accounts, better rewards programs, balance transfer offers and a suite of fancy mobile technology. Though credit card offers reached a 16-year low in 2009, according to market research company Synovate, they nearly doubled in 2010 to 2.7 billion mailings. This trend is expected to continue in 2011. Bottom line: If you don’t make a play, you are giving your competition access to your best members – that is, members who have money, use credit responsibly and spend. Credit cards offer more than an ongoing revenue stream (though no one is discounting the value of increased revenue in this environment). Credit cards build relationships. “People use their credit cards every day,” says Carlton Howard, vice president of Coastal Federal Credit Union in Raleigh, N.C. “They may not drive the most revenue, but they might be the stickiest product we have.” In fact, credit cards offer a wealth of benefits for credit unions:
- Interchange income that is not affected by current legislation.
- An adjustable-rate loan product in a fluctuating rate environment.
- A new connection point for prospective members with good credit.
- Increased wallet share.
- Access to behavioral data about members.
- Cross-sell opportunities monthly via statements.
- Opening to reach underserved and newly credit-impaired consumers with secured card products.
- “Halo effect” for providing a fair product.
- Emotional attachment. According to Robert D. Manning, author of “Credit Card Nation,” consumers hold their first-time card accounts for an average of 15 years.