Credit cards have long been a significant source of revenue for credit unions due to fee and interest income. However, the rise of Buy Now, Pay Later (BNPL) as a popular payment option has led to a decrease in overall credit card usage. This shift can potentially impact the fee and interest revenue generated by your credit union.
There is no need for your credit union to worry. Implementing effective strategies can encourage your members to make the most out of their credit cards.
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Why Might Members Opt for BNPL Over Your Credit Card?
There are many reasons why your members might opt for using BNPL instead of credit cards. Those reasons might include…
- More flexible repayment options
- Longer interest-free repayment periods
- It is easier to get approved with BNPL
While your members may choose BNPL over your credit card, there are numerous advantages to using their credit card. Responsible credit card usage can boost members’ credit scores, and credit cards offer perks like rewards and higher spending limits that BNPL lacks. Let's not forget the added security and fraud protection that comes with credit card usage.
How to Make Your Credit Card Competitive
- Remove the friction of credit card use with digital cards.
A huge reason why BNPL is used in place of credit cards is the ease of use. When your members are checking out, a lot of times, BNPL is a quick option. In order to make credit cards a good option, you can integrate with their digital wallet to provide enhanced convenience during the checkout process, making sure your card is the easiest to use. - Enhance Reward Programs.
Rewards programs are a great way to encourage your members to fully utilize credit cards. Some of the most popular and competitive rewards include miles, cashback, and sign-on bonus. - Targeted Campaigns.
Credit cards would be better for some members than others. Using your member data, find out how to best help those who want rewards, to build their credit score, or travel frequently to use your credit card.
Make Credit Card Income a Key Part of Revenue Generation
Although the payment options are crowded and competitive when someone is ready to check out, there are still great ways to help your members get the most out of their payment options, especially credit cards. To help you, FLEX has authored a guide to help you get a competitive edge and achieve operational efficiency with your card. Click the button below to learn more.
