Can Your Card Management System Do These 5 Things?
Your members expect a great deal from the issuer of their debit and credit cards. Your credit union core system should allow your card products to have the features members have come to expect, including access to transaction data, payment history, and remote controls for cards to manage status. They want this all done seamlessly through both your internet banking portal and your mobile app. As you enable these features through integration with your core, there are additional benefits that card management should be bringing your members and your credit union. Features that make the management of your card products more efficient. Here are 5 items your credit card management system should be doing for you:
1. Promotional teaser rates: Teaser rates are a great way to get new business. They are practically everywhere in the credit card marketplace and can be a great way to promote your credit union card products. Members will benefit from balance transfers and consolidation of high rate cards products from banks, making your teaser rate campaign a win-win.
2. Customizable annual fees: No two credit cards are the same. Some have airline rewards, some have better interest rates, some provide cash back bonuses. Attracting new business to each card type will have varying tactics based on their target markets. Based on your costs, some cards warrant an annual fee, while some are better suited with no fee. Your card management program should allow you to customize these options.
3. Variable rates: With the Federal Funds Rate on the move, a variable rate card program may actually become variable. The right credit union software will allow for streamlined management of your variable rate card products. This means variable rates are managed through an index (prime rate), allowing credit unions to then change the margin as rates increase. Your APR is then automatically calculated across all variable rate loans, including cards. If you are manually making changes for each variable rate loan product, it doesn't have to be that way. This flexibility extends to rate frequency as well, with the right credit union technology, rate changes can happen monthly or quarterly or whenever you choose to make changes.
4. Adjustable grace days: Grace days are the number of days from the last billing cycle that the member has grace before receiving a finance charge. The industry standard is 25 days but some institutions choose 31, providing their members the full month to pay their balance without penalty. Different categories can have different grace periods, such as cash advances that typically have 0 grace days, meaning a member will pay a finance charge on that balance no matter what. Customizing the grace day setting allows your credit union to market to members accordingly. Your credit union card management system should enable adjustable grace periods to gain greater market share.
5. Customizable statement messages: Customized message or descriptions on credit card statements allow you to convey different messages to different members based on varying situations. For delinquent members, an earnest statement that conveys "pay up!" For members who are current on payments, a complementary product offering or just a simple "Thank you for paying on time." With variable rates, customization is everything, including the ability to communicate with your members. The most common need for customizable statement messages is to communicate with your different rate holders. If your current credit card program does not allow you to send customizable messages with your statements, maybe it's time to consider a different solution?
With consumer confidence in banks at all-time lows, credit unions can build member confidence through offering their traditional lower-rate card products with more flexibility. Demonstrate to your members the benefits of your card products, but don't overlook the benefits your credit card management program should be delivering to your staff, enabling new ways to offer advanced services efficiently.