Christian Community CU Builds Credit Card Portfolio While Doing God's Work
SAN DIMAS, Calif. -- When $450 million Christian Community Credit Union cut a $232,500 check last month to Launch a Village, a project that assists two missionaries in their efforts to provide water, sanitation, education, medical care and microenterprise loans for three villages in northern Thailand, it was more than just a Good Samaritan handout.
Fourteen years agoa, Christian Community decided to offer airline miles to credit cardholders. However, as a Christian credit union that promises to use profits to "build God's Kingdom," it decided to also donate a percentage of signature-based interchange income to charities supported by members.
Since 1993, the credit union has donated a total $2.5 million through its "cards that give to missions & ministries" credit card branding, in which 20% of net interchange income is set aside for missionaries and churches.
"We are a Christian-based credit union, our members are Christian, and Christians have a greater mission to help humanity," said John Walling, president/CEO.
The good deeds may be reflected on the credit union's balance sheet, too. Interchange income contributed $600,000 per year in 1993, doubled to nearly $1.25 million by 2003, and rose another 40% to nearly $1.75 million by year end 2007.
But interchange income isn't the only story. Interest income shows a marked increase since introducing the program, which Walling credits for at least part of the gain. Interest income from credit cards alone increased from $1.3 million in 2003 to $2.4 million by 2007. Not only did the number of cards issued increase by 14%, but each card generated more income, rising from an annualized average income of $112 each in 2003 to $160 each last year.
"If you review our financials, you will find that our members use and charge to their credit cards at a much higher level than your average member, so we're earning more by giving a little bit," Walling said.
This year the credit union launched a new affinity credit card program for the Mission Aviation Fellowship, a group of bush pilots who provide transportation for missionaries working overseas. Walling said he's already issued nearly 500 cards since January and feels confident he'll meet his 2008 goal of 1,200 cards.
And the best part: all 500 cardholders are new members for the 29,000-member strong institution.
Christian Community isn't exactly awash in new members, which makes a successful affinity promotion all the more crucial. Walling said his membership growth efforts flat lined last year, opening 2,100 new memberships, but bleeding just as many out the back door. The affinity card has put new member growth back into the black so far this year, he said.
The increase in credit card activity has also made a difference in the bottom line, contributing two-thirds of the credit union's net profits in 2006.
Walling said the feel-good aspect to the strategy is every bit as rewarding as the balance sheet boost. The $232,500 Launch a Village donation will not only provide basic human needs to the three Thai villages, it will also help sustain them economically by providing agricultural and business training, purchasing a four-wheel-drive truck and facilitating the production and marketing of Arabica coffee.
And, it enables the missionaries to spread God's word while improving the lives of villagers.
"The Launch a Village project is an answer to prayer," said Becky Mann, one of two missionaries assigned to the Thailand project.
"Not only do we help bring water and life skills to the poor and remote villages in Thailand, we're also sharing about the Living Water that will flow into each of the villager's heart and soul."
Appealing to the do-gooder in members works for more than just faith-based institutions, Walling said.
"If you want to increase your credit card usage, pick a project that relates to your field of membership or the community you serve, and tell the members if they use the card, you'll do something for that project," he said.
Community credit unions can pick a city park that needs refurbishing, for example, and generate good citizen press from local news outlets.
"Support a project with a little interchange income, and you'll get good citizen attention that will set you apart in the community," he said.