A credit union’s credit card portfolio has potential to become a highly lucrative asset with an appropriately aligned product strategy. A “one-size-fits-all” product strategy cannot support the interests of all members. Offering a robust and extensive suite of credit cards is paramount to success.
What Does A Robust Credit Card Suite Look Like And How Does It Benefit All Parties?
A robust credit card product suite contains a wide array of payment solutions that caters to members that walk in every day. By offering only limited solutions, a credit union may eliminate the opportunity to fulfill a specific need and therefore miss out on an opportunity to maximize credit card revenues.
College students and credit-challenged members are looking for credit building products and a credit card is a simple way to begin to build a history. An institution needs to have products that appeal to the mass market along with members looking for wealth management strategies. Affluent cardmembers are seeking rewards, personalized local service, extra fraud protection, low fees, and customizable rewards options like airline miles, concierge services, cash back, and points.
Obtaining top-of-wallet status in today’s highly competitive environment requires a healthy rewards program. According to the J.D. Power 2015 U.S. Credit Card Satisfaction Study, 52% of cardmembers selected their new card for a better rewards program. The study also found that the 54% of cardmembers who understand and enjoy the benefits their card has to offer use their card more.
Businesses of all sizes and scales seek the ease of use and immediate availability that credit card products provide. Small-business owners rely heavily on access to credit during the launch of their business, so a flexible, low-interest credit solution keeps these members happy and engaged. Established mid-sized corporations seek tailored features and benefits including spend controls, expense monitoring, and larger limits that afford them the availability to make a large purchase when needed.
Having businesses in appropriate products will optimize experiences and will provide enhanced revenue returns for the institution. Offering a small-business owner the flexibility to choose the reward type that interests them, the spend controls necessary to monitor their employees’ utilization, and the expense tools necessary to make the management process seamless creates long-term sustainability and lasting partnerships between the institution and its member base.
What Does The Credit Card Landscape Look Like?
The credit card landscape requires an institution to offer an optimized product suite not only because of member individuality, but also because the average cardmember isn’t carrying as many credit cards as years in the past, lowering the opportunity to capture a share of wallet. While the number of accounts per person is getting lower, the total amount of cards opened nationwide is on the increase. In Q1 2010, about 386 million credit cards accounts existed as compared to about 422 million in Q2 2015.
Capturing Market Share
Smart Credit Matters, a website provided by Elan Financial Services, is dedicated to the financial literacy of its partners’ members and helps consumers of all ages understand how credit works and offers guidance on how to reach their goals. The emerging generations will need resources like this to understand how to best leverage credit to obtain future goals.
Millennials are a strong generation numbering 83.1 million according to the US Census Bureau. Not far behind the millennials is Generation Z, those born around the turn of the century. By the year 2020, Generation Z will account for 40% of all consumers. They expect fast, transparent information and they are used to finding their own information online. Credit unions can expect Generation Z to look for mobile access, immediate real time rewards and alerts, and opportunities for self-education.
Elan Financial Services offers a robust suite of credit card product options to meet the needs of college students and the credit-challenged to the affluent and business owners looking for association benefits and rewards with few restrictions. Partnering credit unions are able to provide Elan’s robust and diversified product suite with their own logo, ensuring their members are satisfied with a customized credit card while maintaining solidarity with their credit union.
For almost 50 years, Elan has helped credit unions grow their business and meet the needs of their members. A key element in this partnership is the online and in-person training program Elan provides new partners to help them navigate the product suite and match credit cards with individual cardmember needs. Year after year, our partners remain pleased with the Elan solution, with more than 96% choosing to renew their partnership with Elan. For more information, call 1-800-223-7009 or visit cupartnership.com.