Penetration Woes!

Credit union credit card portfolios are typically under-penetrated. Learn what your credit union can do to help increase your credit card penetration.


Credit union's portfolios are typically under-penetrated. The average credit union's penetration rate is just 14%, which reflects a phenomenal opportunity. On average, 100 new, active cardholders will earn the credit union an additional $18,780 in Total Annual Revenue (See Table 1).

Table 1

So, what can credit unions do to help increase their penetration?

First, and foremost, if you want to be successful in acquiring new credit card accounts in today's market, you need to offer members a competitive product. The competition is offering Platinum, introductory and/or balance transfer promotional rates, ongoing competitive rates, and enticing reward programs. If you're not offering the same, it is going to be extremely difficult to attract them to your credit union's credit card, especially when the most common reasons members pick an alternative credit card to carry in their wallet is exactly for those reasons. You should also regularly review the solicitations that you personally receive in the mail, to ensure your program remains competitive.

If you're convinced that your program is competitive, then it is time to actively acquire new cardholders. But, you must recognize that potential cardholders will respond differently to different marketing channels and the key is to have a well-rounded acquisition campaign that includes all available marketing channels, so that you can catch the attention of more potential cardholders regardless of their individual preferred channel.

For your next acquisition campaign, consider including all the following marketing strategies:

  • In-branch marketing – Scream about your credit card program! Let members know that the credit union offers a competitive program with attractive rates, low fees, rewards, and cardholder friendly parameters in comparison to the competition. Utilize cost effective in-branch marketing tools such as; teller pins, tent cards, posters, banners, and “Take-Ones”.
    • ACME Continental Credit Union won a CSCU Cameo Award for their recent in-branch promotion. The kick off to this promotion took place in their Chicago Loop Branch at the peak of payday lobby traffic with a cash give-away. Any member in the lobby who could produce their ACME Continental Credit Union Visa Credit Card was awarded a $20 bill along with a hearty "Thank you for carrying our card!" This sparked non-card carrying members to inquire about the ACME Visa card. Everyone who applied during the promotion, regardless of credit score was granted an ACME Visa Credit card, even if it meant a $300 limit. This promotion increased ACME's penetration to 58.4%. Promotions like this are easy to coordinate and can generate fantastic results.
  • Youth Marketing – The Millennials are here – all 83 million of them – and they have the purchasing power and influence to change the world. They are a group of high functioning multi-taskers that rely on technology for social networking and to meet their goals and ambitions. Make sure you meet their needs with technically savvy advertising and applications.
  • Employee Incentive – It is always helpful to generate some excitement around the card program by instituting an employee incentive. Encourage staff to cross-sell the credit union credit card with every member interaction by offering them some kind of incentive. And, incent them for both acquiring a new cardholder and for stealing a balance from another financial institution. It will also foster some great staff morale and teamwork!
    • Universal 1 Credit Union won a CSCU Cameo Award for the ‘Got Visa?' campaign. As a part of their campaign, they challenged staff to hand out Visa express applications to every member they came in contact with. Employees were awarded $3 for every application turned in (after 10) and $10 for every application that was approved.
  • Direct Mail/Pre-approvals –Dare to be different and make your solicitation stand out. In addition, make the offer clear, concise and simple for the member to accept.
  • Introductory Rates/Balance Transfer Promotional Rate – Incentive pricing allows you to acquire not only NEW cardholders, but ACTIVE cardholders. Typically a rate that is 3-5% lower than the standard contractual rate will work best.
    • Greylock Federal Credit Union recently had phenomenal success with a balance transfer promotion. With the ‘Wrap-Up Your Holiday Debt' campaign they increased their outstandings by more than $2.7 million with approximately 950 balance transfers during the 3 month promotion. Greylock offered a promotional 5.99% rate for the life of the transferred balance. They utilized direct mail, features on their website and in their newsletter, in-branch signage and an employee referral incentive to keep the momentum going.
  • Take advantage of the small stuff – don't forget to take advantage of ATM signage, auto-attendant messaging, Credit Card and Share Draft statement inserts, your website, and newsletter. In addition, the national Visa and MasterCard promotions are typically very cost-effective ways to take advantage of their national brand recognition and proven concepts.

When credit unions put out a competitive product and all encompassing acquisition marketing strategy, success is sure to follow!



This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

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July 21, 2008


  • Great article!
  • Excellent article!
  • Nice to see the "Little Guys" get their credit (No pun intended!)
  • Great article...I am passing this onto our our senior management.
    Linda Ponzo
  • Great statistic on how 100 new cards could earn the credit union almost $20,000 in Total Revenue.
    Ed Jesionowski