Stop, Drop, and Come Back Strong

To recapture members' card balances, think outside the promotion box.


When the going gets tough, the tough go platinum at Piedmont Advantage Credit Union ($225M, Winston-Salem, NC). Once faced with stagnant Visa growth and so-so product utilization, the credit union knew it must get its core products up to speed in order to boost its card portfolio and fuel future balance transfers, says Candice Champe, director of e-commerce and IT.

“Before with the card programs, there was no penetration; we weren’t doing a lot of promoting,” Champe says. “Now, it’s definitely not a quiet program.”

The credit union had already revamped promotions for its gold and classic cards when it decided to unveil a new campaign at the end of 2008 for its platinum card, which featured a 6.9% APR for purchases and cash advances. The credit union followed the 2008 campaign with a 2009 summer rate reduction and marketing campaign that surpassed expectations.

Visa Portfolio Tracking

  • The original goal for the three-month summer promotion was $750,000; ultimately, the campaign drew $2.7 million in balance transfers. The credit union surpassed its balance transfer goal by 370%.
  • The credit union opened 695 new Visa accounts, surpassing its goal by 139%.
  • The credit union acquired 50 new members.

For improved credit card growth, product quality plays a major role in the equation, but just as important is timing. The summer rate reduction campaign took place from July to September 2010 in the wake of the Card Act. “It’s been a challenging year to create your own loan growth, but our Visa has been a bright spot,” Champe says.

The credit union has kept its momentum since the initial promotion, demonstrating that continued focus yields continued growth, Champe says. Credit cards now lead originations in Piedmont’s overall loan portfolio year-to-date.

But growth isn't the only bright spot in its credit card portfolio. Balances and asset quality are also improving. The credit union almost doubled its card values outstanding from $9,514,049 in June 2009 to $17,965,864 this September, and a tightening of credit criteria decreased the delinquency in its card portfolio from 3.28% to 1.52% over the same period.

“We tier-based on credit score and the unsecured debt to annual income ratio,” Champe says. “The higher the score and the lower the ratio, the more unsecured debt we will approve for a member.”

The credit union has also added a secured Visa option for those trying to build or repair credit, so every member can take advantage of Piedmont’s card products. “They can still gain membership, and no one walks away empty-handed,” Champe says.