The nearly identical payment behaviors between CU members and non-members

Talk with any credit union leader who loves their members, and you’ll hear how very special those members are. There’s little doubt as to the validity of this assessment. After all, credit union people are, by and large, wonderful individuals and families.

At the same time, new research shows that credit union members share many traits with non-members, particularly when it comes to daily spending behaviors.

A recent study by Co-op Solutions, EY and Mastercard, for instance, found that members and non-members have the same tendencies for credit, debit and cash use. Nearly identical, in fact. As an example, the majority of credit union members and non-members alike named debit cards as their primary method for personal purchases and bill payment. Credit cards followed closely behind with 35 percent of members and 31 percent of non-members naming them as their preferred personal purchases method. Very few named cash as a favorite daily tool; just 12 percent of members and 15 percent of non-members said cash was best suited to their day-to-day purchases.

The contemporary credit cardholder mindset

Among credit cardholders, rewards have the biggest influence on day-to-day use. Nearly 60 percent of credit union members said more points per dollar or bigger cash-back on purchases would encourage them to use their credit cards more often; 56 percent (points) and 46 percent (cash-back) of non-members agreed.

Credit cardholders in both membership camps appear less likely to be motivated by newer forms of credit access, such as buy now, pay later (BNPL). Just 15 percent of members and 15 percent of non-members selected the feature as something that would make them use their cards more often.

Perhaps not surprisingly, credit union members are slightly more anxious about debt, which may explain their mild over-indexing on the use of debit. Whereas 41 percent of credit union members say the specter of taking on more debt keeps them from choosing credit more often, just 28 percent of non-members shared this worry. Credit union members also appear to be more price sensitive, with 21 percent citing too-high APRs as a reason to leave their credit card in the wallet. Only 15 percent of non-members mentioned the APR in their survey responses.

Focus on universal points of reluctance

Overall, however, members and non-members largely agreed on other barriers to credit card use. Every credit union payments strategist seeking to increase engagement will find this intelligence interesting.

Trailing concerns about debt and APR, the next most significant areas of reluctance to use an existing credit card were as follows:

• “I like how I currently manage my transactions.”
• “Possibilities of fraud.”
• “Hidden/excessive fees.”
• “Credit limit isn’t high enough.”
• “Can’t use it for all payments.”

The first of these five is not terribly surprising, as we all know most humans are opposed to change. The remainder of the worries can be addressed through frequent and proactive communication, in good times and in bad. Alerting members to suspicious transactions is a best practice; going a step farther by allowing cardholders to set their own limits and notification triggers is an even better practice. As for excessive or hidden fees, credit unions would do well to continuously monitor the competition and situate their pricing competitively (or promote existing pricing differentiators) at every turn.

The final two barriers to more frequent credit card use speak directly to consumer expectations for convenient, friction-free experiences. Members and non-members alike will almost always transact down the paths of least resistance. Credit unions that predictively (and responsibly) extend credit limits are rewarded with more frequent transactions. The same is true for credit unions that invest in digital payment integrations that meet members where they are, giving them plenty of options for transacting with their credit union card when and how they want.

Prospects engage just like members

Findings like these indicate that credit unions may be closer than they think to gaining new members with relative ease. Given that non-member perceptions, preferences and behaviors around payments are nearly identical to members, prospects are likely to respond to data-driven campaigns in much the same way. With slight tweaks to the copy and tone, effective organic-growth campaigns could be migrated to acquisition campaigns rather inexpensively.

The research also underscores the massive word-of-mouth opportunity credit unions have before them. Members, especially those rewarded handsomely for referrals, are one of the strongest assets a credit union may have in its marketing arsenal. By treating the payments channel as the surest pathway to growth, credit unions can deepen relationships with existing members while gaining new memberships in droves.

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