Are credit unions missing out on a growth opportunity?

When reviewing their revenue data, 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 that credit unions don’t have strategies in place to increase their card portfolios. They do. Credit unions use various marketing initiatives, competitive rates, rewards features, and more to enhance their card portfolios. However, there is more to do. And, if you want your credit union to capture and maintain top-of-wallet revenue, more must be done. The following five strategies are proven initiatives that 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 but have been very rewarding.

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 opportunities!

Using your own data to drive a compliant credit line increase program for eligible cardholders solves a couple of problems. First, limiting someone’s credit 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 your card 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, after summer vacation or back-to-school spending are 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 reward, 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. Analyzing the data in your customer and cardholder files and considering your underwriting policies will help you identify members who don’t have a credit card but are eligible for one. Then, make it easy—very easy—to apply for a card.

Employee Advocates

Your staff members 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. They’re also 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 sweepstake—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 with other issues.

Keep at It

The secret sixth tip is to be relentless. It’s critical not to take half-measures. Don’t try just one suggestion and expect great results. Also, don’t try something once and think that’s it. 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.

Trellance’s Card Portfolio Growth Solution provides credit unions with a data-driven, implementation-ready, 12-month marketing calendar that incorporates six full campaigns to drive portfolio growth. Visit us at www.trellance.com or contact us at info@trellance.com for more information.

Ann Farrell

Ann Farrell

Ann Farrell is the Director of Portfolio Growth at Trellance and has been leading Trellance’s Card Portfolio Growth Solutions since its inception in 2015.  She has more than 35 ... Web: www.trellance.com Details

More News