Credit unions have long been celebrated for their strong member retention rates and loyal customer base. However, while members may maintain their loyalty through car loans or mortgages, they are increasingly turning to other financial institutions (FIs) for their primary financial services.
Traditionally, credit unions have focused on consumer lending, offering the lowest rates to members. But now, it's time to look beyond the lending department and explore the untapped potential in credit card programs.
The Opportunity in Credit Card Programs
Consider this:
- In the top three U.S. banks, credit cards account for roughly 26% of their loan volume.
- For credit unions, credit cards represent just over 6% of their loan volume.
This stark contrast highlights a significant opportunity for credit unions to evolve alongside their members' changing lifestyles and spending habits. By offering competitive credit card programs, credit unions can increase their presence in members' everyday financial lives and become their go-to payment provider.
The Power of Being Top-of-Wallet
Think about how often you use your credit card in a typical week versus how often you think about your car loan. Being top-of-wallet not only keeps your credit union top-of-mind for members, but it also offers valuable data insights.
When credit unions are their members' primary choice for payments, they gain a wealth of information on spending patterns. This data is crucial for understanding member behavior and can inform the development of tailored products and services.
Key Benefits of Credit Card Data
- Insight into Member Behavior: Understand spending habits to better meet members' needs.
- Enhanced Product Offerings: Tailor products like car loans and HELOCs based on real-time data.
- Effective Marketing: Determine which marketing tactics and channels resonate most with members.
Designing a Member-Centric Card Program
When building a card program, focus on creating one that aligns with your members' needs. Here’s what members today expect:
- Seamless Money Management: Easy transfers between accounts and other FIs.
- Transparency: Clear information about fees and charges.
- Rewards: Programs that provide tangible benefits for activity.
- Customized Marketing: Personalized offers that are relevant to their current situation.
By anticipating future needs through present spending analysis, your credit union can stay ahead of the curve.
Get Competitive with FLEX Card Technology
Members have evolved in how they spend their money and the methods they use for transactions. It’s time for your credit union’s credit card offerings to evolve with them.
By prioritizing credit card programs, your credit union can:
- Enhance member loyalty.
- Drive new revenue streams.
- Gain critical insights into member behavior.
Ready to elevate your credit union’s member experience? Explore our guide on how to build a competitive credit card program today!
