The Trellance Data Blog

Are Credit Unions Missing Out On a Growth Opportunity?

Posted by Ann Farrell on Aug 6, 2019 12:52:00 PM


Credit unions see an average of 7% year-over-year growth in their credit card portfolio revenue. That’s not bad, but it’s also not great. The issue isn’t necessarily that credit unions don’t have strategies in place to increase their card portfolio. They do. There are marketing initiatives, competitive rates, rewards features, and so much more. Nevertheless, more can be done. And, if you want your credit union to capture top-of-wallet revenue, more has to be done. The following five strategies are tried and true, and have helped over a hundred credit unions grow their credit card portfolios by an average of 19% per year. Fair warning: these are easier said than done.

Credit Line Increases

On average, about 60% of a credit union’s cardholder accounts qualify for a credit increase. If you haven’t run a credit line increase in a few years, that percentage is even higher. That presents a lot of opportunity!

Credit increases help in a couple ways. First, limiting someone’s credit necessarily limits how much they can spend. In turn, that limits your credit card portfolio revenue. Second, most people are wary about utilizing a high percentage of their credit. Offering credit line increases makes cardholders feel comfortable spending more, so long as they keep their credit utilization percentage low.

Balance Transfer Opportunities

One reason some credit card programs remain stagnant is that those cards have moved to “back of wallet”. Recapturing interest and interchange from competitors’ cards can move yours back to the top. An easy way to accomplish this is through balance transfer opportunities. While you can certainly offer your members balance transfer opportunities at any time, you should be more strategic about it. After holiday spending, or after summer vacation or back-to-school spending are two great times to offer balance transfers. Offering low transfer rates can save your members a lot of money in the long run. Plus, it puts your card right back where it belongs: in front of your competitors’ cards.

Reward Usage

Not everyone is a credit card rewards geek. Most people don’t hunt down the best rewards or the most travel miles. However, most people do appreciate a little something extra. Create ways to reward cardholders for using your cards. It could be cash back rewards, local specials and deals, or even donations to local charities and organizations made in the credit union’s name. Whatever you choose, it should motivate your members to use your credit card over their other options.

Promote New Account Acquisition

The first three tips help you maximize your revenue from existing cardholders. Still, the easiest way to capture new revenue is to open more accounts and issue more cards. Identify members who don’t have a credit card but who are eligible for one. Then, make it easy—very easy—to open a new account.

Employee Advocates

Your staff are some of your credit union’s best advocates. In many cases, they’re the ones best positioned to sing the praises of your credit cards. Often, they’re the ones who help members sign up for new credit accounts. Incentivize your staff to bring in new accounts. By implementing a chance for a prize—such as a sweepstakes—you can spur a flurry of new account openings.

Furthermore, if you open that incentives package to the entire staff, you increase your card exposure. Don’t limit it to credit officers. Bring in mortgage loan staff, tellers, and even IT. They’ll reach out to friends and family, and it provides them an opportunity to cross-sell to members they’re helping.

Keep at It

The secret sixth tip is to be relentless. It’s critical not to take half-measures. Don’t try just one tip and expect great results. Also, don’t try something once and think you’re done. Increasing your year-over-year growth is a year-long effort. Seeing the kind of credit card portfolio metrics mentioned earlier takes time, dedication, and vision.

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Topics: Business Intelligence, Credit Unions, Membership, Lending