Strategies to Increase Debit Card Usage

Many credit unions just issue a debit card to their members with a checking account. Learn how Patriot FCU, University FCU and Citibank structure their programs.


Many credit unions automatically offer a debit card to a member when he opens a checking account. The general belief is that once a member has the debit card, she will begin using it frequently thereby generating interchange income for the credit union. Often, these credit unions offer little member education beyond basic material on the website and in the monthly newsletter.

Does this sound like your debit card strategy?

Today, a few innovative credit unions and banks are doing more than just offering a debit card by taking a more proactive approach to encouraging member usage- especially of the signature-based option.

Patriot Federal Credit Union ($314M in Chambersburg , PA)

Patriot builds up the hype of its debit card program by offering a monthly and annual drawing. Each time a member selects “credit” at the point of sale she is entered to win a $50 or $100 Visa gift card each month and a $1000 Visa gift card at the end of the year.

“The promotion has been successful,” said Tom Iacona, vice president of marketing. “We increased the number of signature-based transactions from 1.1 million in 2003 to 1.3 million in 2004.” Patriot’s non-interest income to average assets ratio increased 32 basis points to 1.69 percent during the same time period. The debit card promotion played a part in the rise.

University Federal Credit Union ($671M in Austin, TX)

University ran a “swipe and win” promotion a few years ago. It did not generate the expected results because members were not clear on the difference between PIN and signature-based transactions. Executives realized that they need to specifically promote signature-based transactions the next time to encourage specific member behavior.

University’s executive team is now considering offering a rewards program to do just this. “Our challenge is deciding how much of the interchange income we should give back to members,” said Brad Shoff, senior manager of remote delivery. University calculates that its signature transactions are on average five times as profitable as PIN-based transactions. Therefore, it is in their best interest to offer a program that encourages signature transactions.


Citibank recognized that offering a rewards program for both their debit and credit cards helps to increase member usage and their interchange income. As a result, the bank launched its Thank You rewards program in July 2004. It designed the program so that the more active accounts a customer has, the more points s/he will generate each month. For example, customers can combine the points on their debit and credit cards and use them toward a single prize. Customers can redeem their rewards points online or via phone for a variety of products that include flat-screen televisions, concert tickets and golf passes.

Learn more about innovative debit card strategies in the webinar recording Just Debit: Creating a Successful Debit Card Program, sponsored by the Callahan Center for Credit Union Leadership and Certegy.




June 20, 2005


  • For debit card usage a clean email account for your financial transactions and accounts, do not use that account for ANY other online activity. You will automatically know that all mail not coming to THAT account is not related to your real financial situation. Scrutinize all mails coming to your special account and request 'text-based' mails whenever possible.
    Debit Card
  • Can you kindly elaborate further the term 'Each time a member selects “credit” at the point of sale she is entered to win a $50 or $100 Visa gift card each month and a $1000 Visa gift card at the end of the year'?

    How does this mechanic works? When a cardholder holds a debit card, any spending made will be deducted directly from their account. Thus, how does a cardholder selects " credit" at the point of sales?

    Appreciate your urgent reply soonest. Thank you.


    Lena Rahman
  • Lena,

    Your processor can tell you whether a transaction is signature or pin based. Often the big merchants will force your debit card users into using their pin by presenting the pin pad to the customer.

    Customers can sidestep this by pressing cancel and credit - and then the bigger merchants can then "stop" the transactions by claiming that it was "denied by the institution" - of course the transaction never hit the switch.
    Brad Rose