According to a recent study, the annual inflation rate in the United States grew to 9.1% by June 2022 - the highest rate since 1981. This surge in inflation, along with rising fuel and essential item prices, is changing how people shop for credit cards.
However, this shift presents an opportunity for credit unions. As the saying goes, "necessity is the mother of invention." Savvy credit unions are attracting new members through innovative credit card reward offers and other techniques.
The State of the Credit Card Market
Financial Challenges
Credit union members are caught between two major financial shifts:
- Inflation: Leading to increased prices on essential items.
- Credit Card Usage: Members are relying more on credit cards to manage expenses, leading to higher costs as the Federal Reserve increases rates.
These changes create confusion and frustration among members and pose a challenge for credit unions aiming to attract a wider audience.
Differentiating Your Credit Card Offering
Focus on Rewards
Credit unions can innovate by focusing less on credit itself and more on the rewards offered to members. Here are a few examples:
- Change Saving Opportunities: Members can round up debit or credit transactions to the nearest dollar, with the difference deposited into a savings account. For instance, a $9.50 purchase rounds up to $10.00, with $0.50 saved.
- Behavior-Based Incentives: Members can be grouped based on whether transactions are executed using a PIN or a signature. Each group has unique benefits based on real, verified behaviors and preferences, making rewards more personal and relevant.
Encourage Sign-Ups
Rewarding members for every dollar spent encourages them to sign up for credit cards. As adoption increases, so does satisfaction, creating a mutually beneficial situation for both credit unions and their members.
Superior Credit Card Management Services
At FLEX, we understand that modern credit union members need, expect, and deserve higher quality banking services. That's why we've created a helpful resource on offering accessible and intuitive card services. This resource will help you build trust and confidence with your members and provide innovative credit card offerings that fulfill their needs.
Click below to learn more!
