3 Strategies to Enhance Cardholder Engagement [+ Free Card eGuide]

Cardholder engagement is integral for your credit union, but it is more than offering a variety of card products. Cardholder engagement deals with the experience of the cardholder long before and after they use their card to pay for something.

It is about differentiating your credit union and creating a holistic financial experience with card usage being as frictionless as possible. 

In this blog post, we’ll walk through the importance of card holder engagement, the challenges of being top of wallet, and strategies to elevate your cardholder engagement. Keep reading to discover tips for success. 

What is Cardholder Engagement & Why is it so Important?

Increased Usage and Revenue: Engaged cardholders are more likely to use their credit and debit cards frequently, leading to increased transaction volumes. This translates into higher interchange fee revenue for the credit union.

Member Retention: Research shows that cardholder engagement often correlates with member satisfaction. Engaged members are less likely to switch to competitors, helping credit unions retain their member base.

Reduced Risk of Dormancy: Actively engaged cardholders that see value in the rewards are less likely to let their accounts go dormant.

This ensures that credit unions maintain a healthy portfolio of active accounts, which is important for both financial stability and regulatory compliance.

Competitive Advantage: In a competitive financial services market, credit unions that prioritize and enhance cardholder engagement can differentiate themselves from other financial institutions, thereby attracting new members and retaining existing ones.

What are the Challenges with Cardholder Engagement?

The landscape of the financial services industry is growing increasingly crowded, with banks, fintechs, and credit unions all vying for the attention of the same target audience.

Amidst this competition, credit unions face additional challenges within their own operations. Limited resources can hinder the ability to deliver a top-notch cardholder experience, while keeping pace with evolving member preferences adds another layer of complexity.

These combined factors make achieving robust cardholder engagement a significant challenge for credit unions.

3 Strategies to Increase Cardholder Engagement

Increasing cardholder engagement will take some time and trial and error, but these tips will help your credit union move in the right direction. 

1. Personalized Rewards and Offers

There are many things at play when creating a personalized experience for your members. 

One of the most important factors in doing this is effectively utilizing member data. This can include...

• Demographics
• Transaction data
• Life stages

For example, if a member frequently shops at certain retailers or spends in specific categories, tailor rewards to those preferences.

2. Enhanced Mobile Experience

Ensure your credit union’s mobile app supports seamless card management, including real-time transaction tracking, rewards redemption, and fraud alerts. Incorporate features like virtual cards and mobile wallet integration (e.g., Apple Pay, Google Pay).

Regularly update your mobile app to ensure a smooth, user-friendly experience that encourages members to engage with their cards more frequently.

3. Seamless Digital Onboarding

Nothing is more important than a frictionless onboarding process for a new card. Streamline the card activation process through your mobile app or website, making it quick and easy for members to start using their cards.

Provide interactive tutorials during the onboarding process that highlight card benefits, rewards, and security features to ensure new cardholders understand the value of their card.

Experience the Benefits of Cardholder Engagement with FLEX

There are many benefits to cardholder engagement, many of which you do not want to leave on the table.

At FLEX, we understand the important role that your cards play in your credit union’s portfolio. That is why we recently authored an eGuide that will help you with everything related to your card offerings. Click the button below to learn more.