A credit card portfolio can be a valuable asset for a credit union. Credit cards engender loyalty via company or school branding, and they generate fee income. Plus, a card deepens member relationships.
But should credit unions keeps or sell their card portfolios? Tim Kolk of TRK advisors recognizes how delicate a question that can be.
Retaining control, whether in regard to servicing or member interaction, is a definite advantage to keeping the portfolio. However, there is a certain amount of risk associated with the portfolio, which is a primary concern among credit unions.
When credit unions decide to sell, Kolk advises they seek the buy-in of the staff, the Board, and the members. Once the sale is complete, credit unions can allocate now-free resources to other areas of the credit union. That’s a benefit with bottom-line implications.
Each credit union's situation is different, and different factors will drive the decision of to sell or not to sell. But in all circumstances, the decision should not be made lightly. Errors have significant downstream effect for your credit union and members.