eBrief: Make Your Card Program a Priority in 2010

Looking for higher yields? Consider your card portfolio.


With record deposit inflows, consumer deleveraging, and low investment yields, credit unions cannot rely on investment income to support lower interest income from slowing loan volume. The last time investment yields were this low was in mid-2003. Credit unions with capital constraints must earn their way back. With low yields, credit unions must lend to enhance income.

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Your credit card program can provide revolving credit to members at much better terms than many competitors. In addition, promoting usage can increase interchange income. According to the Callahan & Associates annual Non-interest Income Survey, as of year-end 2009 credit card interchange income represented 9.5% of total non-interest income (fee income and other operating income).

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Your portfolio might have seen unprecedented changes over the past year due to new regulations and an ever-changing economic environment. Here are just four reasons why you need to embrace your card portfolio:

  • Credit unions with deeper credit card penetration have a higher number of share and loan accounts per member. Analyze your member product usage to examine the influence of the credit card.

  • Using the credit union’s card saves your members money in finance charges and fees. Provide real-life examples of this for your front-line staff.

  • You weren’t forced by the government to offer consumer-friendly terms. Make sure your members understand why programs are changing and how you’ve never stopped looking out for them.

  • Many variables will contribute to your card portfolio’s success or failure. Understand the intricacies of your program's profitability. For example, according to data from CSCU, its member credit unions averaged $326.44 total revenue per active credit card account in 2008.