Increased credit card use – The perfect holiday gift for the CEO on your list

Dear Santa,  

I would like more non-interest income please…

Before you know it, the holiday season will be upon us – specifically Black Friday & Cyber Monday. Yes, these are two huge, very real holidays. For the past two years, Cyber Monday has generated the most sales of any day in the week after Thanksgiving, according to comScore Inc.  This year is expected to be no different, despite current economic uncertainty.

While this a great news for retailers and shippers, it is also great news for credit unions. Increased online purchase may mean increased credit card usage, which also means increased interchange income. And a lift in non-interest income at the end of the year is most likely on every CU CEO’s holiday wish list.

Now the only challenge is ensuring your members select your card from their wallet when they go to make a purchase.

Here are three suggestions to keep your card top-of-wallet.

1. Provide an incentive – It has been proven than members will choose to use a card that provides them a benefit. So don’t wait: offer something extra, communicate and remind them about your card.Consider these incentive ideas:
   • Increase cash back or points. If you have the ability to offer reward points to your members, offer a way for them to accumulate points more quickly during a selected time period. Consider doubling, tripling or even quadrupling points the week of Thanksgiving and the immediate week after for the. The impact in cost may be outweighed by the increase in non-interest income.
   • Increase credit limits. Review your portfolio to identify members who may qualify for an increased credit limit and let them know you’re willing to give them a little more breathing room during the holiday shopping season.
   • Let members earn money for causes. Give members the option to use points earned during this time for donations to a charity. This can be a wonderful incentive if the member wants to provide something to their favorite cause.
   • Offer skip-a-payment. If you already don’t offer rewards points, there are still opportunities to provide incentives for card use. Consider offering members the option to skip a payment during the month of December without any penalties
2. Communicate a benefit + value statement – Credit union credit cards provide financial value to members. Remind members of how much they save in fees and lower rates when they with their CU credit card. If possible, provide a comparison to the typical non-CU card rates or fees and translate that difference into monthly or yearly savings to your members.In addition to reminding members about the value of your credit card, communicate with them about the benefits you offer. For example, if you have a rewards program make sure your members know how great it is; promote any incentives you are offering. If you offer your members the ability to skip their December credit card payments, talk up this benefit and how it is a point of differentiation
3. Identify your opportunity – One of the best ways to help ensure your message will be heard is to make certain it is being directed to the most appropriate and receptive audience.  Untargeted communication is fine for general market awareness, but it’s important to focus promotional communications to the specific people you want to influence.Here are some key audiences to consider:
   • members who are active credit card users
   • members who are new cardholders
   • members who are low-use card holders
   • members who do not have a CU credit card
   • prospective members

   Who is your best prospect for increased use? And what do you know about their habits, lifestyle and mindset that will help shape your messages to your selected audiences? Look for ways to make it easy for your audience to take the action you want them to take. For instance, you may want to consider sending pre-approval to current non-cardholding members who have similar characteristics to your active users if you have the ability to quickly issue plastic.

   While other retail holidays do not have the same online purchase lift as Black Friday and Cyber Monday, these tactics can work well in other higher shopping seasons. So get out there and see what you can market share you can take over.  Your members and your balance sheet will thank you.