It’s hard to believe that 2015 is right around the corner and 2014 holiday shopping comes to mind, along with all the credit card spending that accompanied those shopping sprees. If your members are like many consumers, they can get caught up in the moment and tend to overspend, then the realization comes when the billing statements start to arrive in the mail.
Now is a great time for credit unions to take action and help members ease the pain of that holiday shopping. Credit unions traditionally have lower interest rates than that of competition, especially when members fall prey to in store financing that can carry high interest rates, many times upwards of 29%. One great tool that credit unions can utilize is a balance transfer promotion to move those high-interest purchases to your credit unions program. If you are offering a rewards program, incenting members to transfer balances with additional rewards, is another way to attract new outstanding balances. Many credit unions develop their own campaign; however, many look to outside sources for assistance. If you participate in any of the LSC®’s programs, they provide a turnkey “Balance Transfer” promotion, and will assist in the marketing this valuable tool.
Marketing your card program should be an ongoing effort and not something that comes to mind when you see declines in your program’s performance and /or income. Nurturing your program throughout the year guarantees peak performance. Utilizing a balance transfer promotion is one way, offering rewards is another. Did you know that on average credit unions offering rewards see a >10% penetration rate, 2-3 more transactions per month, and $5 higher spend than those without rewards programs? Offering introductory low interest rates to attract new accounts or enhance a balance transfer promotion is yet another option that works for many credit unions. According to a recent Callahan article, “Evaluating The Value Of Credit Cards,” the author highlights credit card penetration as essential to all other balance sheet metrics. Key ratios indicate that credit union’s with >25% penetration had a loan-share ratio nearly seven percentage points higher, and capital/asset ratios of 11.43%-vs-10.62% compared to their peers. Impressive.
Marketing your program is just one aspect of the overall soundness of your program. Credit unions should be continually evaluating their program’s performance by monitoring portfolio results and consider how they compare to their peers. This is not always an easy task and many credit union’s struggle with where to start and deciding which statistics are most important. Not all credit unions are created equal, nor do all strategies work for all credit unions. This is where portfolio development assistance is crucial! Look for this value add from you service provider, again, LSC has a designated Portfolio Development team that assists its member credit unions with a detailed and profession analysis of their program. In addition, they provide comprehensive tools, marketing assistance, and performance strategies to address any findings resulting from their analysis.
Another important aspect of any card program or card provider is the value they bring to the table. You must be able to demonstrate that your card program has a true value proposition. LSC wants to back up our philosophy of “Helping Credit Unions Compete” by introducing our “Get Paid to Grow Your Program”campaign. Participation is simple and LSC has put together a comprehensive plan to optimize your success, including a $4 per new account incentive back to the credit union.
Take a closer look at LSC’s commitment to improving your credit card ROI, or to sign up for the campaign, visit them at www.lsc.net or email them at firstname.lastname@example.org
Don’t take your card programs for granted – prepare for the future by getting a performance review and look for new ways to enhance and market your program!