Credit card programs, as beneficial they are can face challenges like lacking focus, requiring a completely new system to learn, unimpressive products, no encouraging metrics, etc.

So, how do you push for an incremental, low cost, data-driven win around credit cards? This article provides you with an insight into this question.

1. Close inactive cards - Members who are not using their cards are costing your Credit Union money. Closing these credit cards based on factors like zero balance or no purchases in the past year can help you reallocate the limit to other active credit cardholders. The members can be given one month's validity to be active, and on failure, the credit cards can be closed.
   
2. Increase Card Limits – Develop an in-house method to determine by what amount you want to increase the credit limits and how. This will speed up sales processes and will allow you more time for other credit management tasks. Questions you should consider asking is whether you want to have a liberal or conservative approach, whether you have confidence in your ‘in-house’ collection process, what is the length of the term which is provided to the member etc.
   
3. Staff Education- The cards and limits should be provided to people who are going to use it. Having these conversations with credit card holders is extremely important. Always be on the lookout for opportunities like balance transfers.
   
4. Balance the Closures and Increase limits based on the seasonal cycle - Increase limits for members who will be able to take advantage of this opportunity.
   
5. Diversify and solidify your products - Having separate credit cards, for example: Shifting from visa master card and providing a standard credit card and a rewards credit card with a certain amount of cashback on purchases, no first-year fee, etc, can prove to be attractive for members and they will have more to choose from. It is important to be confident about your products.

What impact are these steps likely to bring?

These steps will have an impact on your income through the interchange, interest income, late fees, etc. In the face of concerns like the delinquency rate prone to an increase, if your approach is traditionally conservative and low on delinquency, there will be a scope of healthy increase, and sufficient time to direct it towards the right direction. Overall, the impact will be positive. Initially, there will be no increase in the number of account holders, but there will be a significant increase in incomes like balances, limit dollars, purchase dollars, etc.

CONCLUSION

In this article, we have discussed the example of the Vibrant Credit Union who has implemented these steps and achieved positive results. For most members, the credit card is primary. Sometimes the need is to push the envelope and move away from a conservative approach, to the extent which can benefit members, and at the same time be an advantage for your organization.

Watch other credit card focused case studies from different credit unions via this on-demand credit card workshop.