One of the fundamental purposes of a credit union is to save members money. Credit unions routinely do this by offering lower interest rates on loans and charging minimal fees for services. Both of which, helped credit unions hit a record number of members over the last two years, as a growing number of consumers grew fed up with the fees at the nation's biggest banks and took their money elsewhere.
According to the National Credit Union Administration (NCUA), nationwide credit union membership increased to 91.8 million, a rise of more than 1.3 million in 2011 and continued unprecedented membership growth into 2012, as more Americans heeded the call to move their money from high priced banks.
Now that we have moved them over from their banks, what do we need to do in 2013 to keep them?
Here are some interesting facts regarding bank issued credit cards:
Your members and potential members are currently using credit cards. If you do not have a program, or they are not using your credit union’s credit card, they are likely using one issued by a bank. We know these cards are not as competitive or beneficial for your members, as a credit card from your credit union would be. With retail spending up 8% over last year and bank card rates continuing to increase, credit cards are becoming a mandatory product offering for credit unions. Credit unions of all sizes are reevaluating the credit card space and determining how they can best serve the needs of their members.
“Being on an agent program for the last seven years we felt it was time to explore the possibility of rebuilding our own credit card program. Once our board approved the strategic initiative, we began to search for a partner. We wanted a partner mainly because we believed we needed assistance in navigating recent regulatory changes and we knew we needed help in making our program competitive. ICUL Service Corporation rose to the top throughout our search process. We feel ICUL Service Corporation has the best program at the best price and we look forward to a strong partnership,” says Mike Athens, vice president of Operations, Rio Grande Credit Union (Albuquerque, NM).
As reported in Callahan & Associates, “Credit Unions with credit card portfolios outperform those who don’t have credit card portfolios….” Those credit unions have higher ROAs, have more services per household and achieve a higher profitability per account.
Now is the time to focus on issuing or revamping your credit card program. It is a good choice for your credit union and a good choice for your members!
For more information contact your Missouri Credit Union Association (MCUA) field representative at 800.392.3074.