Credit cards are not new, and they have become ubiquitous. Having a robust credit card program that exceeds member expectations is a primary driver in making credit unions stand out from the competition. With credit cards being one of the most profitable products offered by any financial institution, focusing on growing credit card programs needs to be a key initiative for every credit union.
According to Fiserv, 80% of all consumers have credit cards and 73% used them in the 30 days prior to their Expectations & Experiences survey being conducted. Within that segment, 92% reported being satisfied with their experience. With a positive view of this product as a whole, your members and consumers at large want a card that is reliable and accessible, supported by top-notch service and an experienced team. The card must, at a minimum, meet their needs, but with fierce competition in the cards space, providing differentiators is a must.
When approaching how to grow your credit card program, it should be thoughtfully considered with credit union members at the forefront of all planning and actions taken.
1. Meet The Needs of Your Members
What are your members seeking? Low interest rates? Cards for students with low balance limits? Balance transfer incentives? Rewards programs? And what are they trying to achieve? Building credit? Day-to-day usage? Let the voice of your members be your guide in determining which areas of your card program to adjust and emphasize. Also, consider the calendar and how higher spending times of the year can impact their needs. Holiday shopping, vacations, and back-to-school are all opportunities to incentivize engagement.
2. Segment and Leverage Your Member Data
You can opt to survey your members to hear what they are seeking, but you already have a treasure trove of information at your fingertips in terms of their transactional data and member data that lives on your core. Integration between your core and cards program is essential, along with accessing reporting that analyzes your spending trends and identifies areas of opportunity for growth that you can focus goals on. Digging into your data and identifying personas can help in communicating the right card program benefits to the right audience. Recent research by Raddon® provided the following characteristics as examples:
- Balance Rollers: 34% of cardholders do not charge often but carry monthly balances.
- Heavy Users: 18% of cardholders carry monthly balances and charge more frequently.
- Convenience Users: 32% of cardholders charge a lot but do not carry a balance, paying each month in full.
- Low-Moderate Users: 16% of cardholders charge small amounts and pay off their balances each month.
3. Connect With Members Through Marketing
Communicate the awesome promotions and benefits that your credit union offers. The card that sits top-of-wallet—physical or digital wallet—may be holding that powerful spot simply out of convenience, not because it is benefiting the consumer with the best incentives. Whether through an onboarding campaign for new members, a reboarding campaign for existing members, social media advertising, or a targeted credit card communications initiative, educating your members and reminding them of the credit card options available that can benefit their financial health also can impact your credit union’s bottom line.
4. Audit and Update Your Credit Underwriting Policies
Ensure your team is on the same page in terms of your institution’s underwriting policies. Risk profiles vary from applicant to applicant, but also from loan product to loan product. Credit cards are different than other loan products and varied factors will weigh into your approve/decline process. Review the standardized metrics you are factoring in to make credit decisions and implement review guidelines on how to assess members with unique needs or circumstances. Confirm the right card offering fits the application and suggest appropriate card solutions when necessary.
5. Account for Risk
When trying to grow your card portfolio, seek to approve as many members as possible balanced with protecting your institution from risk. Decisions regarding creditworthiness may be variable based on factors such as your credit union’s appetite for risk, secured vs. unsecured cards, interest rate factors, and your existing member relationships.
6. Partner for Success
Credit unions who partner with Synergent can access credit card solutions alongside additional leading payments solutions, hosted Symitar® Episys® core processing, member marketing, and technology support—all under one roof. The Synergent Advantage means credit unions who partner with us for one or numerous solutions access a team of experts who work together day in and day out and know how to integrate products and programs holistically.
Case Study: Sebasticook Valley FCU
When Sebasticook Valley FCU decided to run a credit card campaign, they already had been offering a Visa credit card to their members for years. But there was a significant opportunity for growth in both card adoption and card balances. Partnering with Synergent Marketing Services, the credit union ran a campaign with a printed postcard and matching email to achieve a 730% increase in total new lines of credit! Additionally, there was a 155% increase in the number of cards opened during the same time in the prior year.
“For the past few years we have focused on marketing to members making ACH loan payments to other financial institutions by leveraging our member data” shared Mindy Nyman, Operations Manager for Sebasticook Valley FCU. “We have had continued success with this approach and could not be happier. Synergent works with us on not only the strategy, but also on how to represent the credit union brand in a fun but professional way.”
To learn more about the credit card solutions available through and recommended by Synergent, please contact us today.