The $1.4 billion Texas Dow Employees Credit Union, headquartered in Lake Jackson, found that diversifying its card programs to meet the different needs of its diverse 118,000 membership most effectively represented its effort to expand its reach.
"If we are going to offer cards, we need to offer the cards that our members really want," observed Ronald Wright, vice president of payment systems for the credit union. "If you don't do both, I am not sure we should offer cards."
Wright was well-suited to the task, coming not only from outside the card industry, but also outside of financial services.
"Yeah, I came to this from the hospitality industry," Wright said. "I managed hotels, managed reservation centers and built hospitality packages that resorts and hotels could offer their customers. Right away I realized that a card program could and maybe should be built in much the same way as I used to build hospitality packages."
Working with MasterCard and its processor, TNB Card Services, Wright and Texas Dow gradually brought a suite of card offerings to its membership, starting with a student card Texas Dow rolled out in conjunction with its student lending.
In this program the credit union offers students who take out one of its student loans a MasterCard with a $2,000 limit that is interest free for four years. The purpose of the card, Wright explained, was to help the students both build their credit and finance the different parts of student life.
From there it was a relatively small move to start offering MasterCard's family card. With a family card, an adult cardholder can share a line of credit with a minor cardholder and thus help teach them proper management of money and credit.
Both of these offerings drew a lot of support from Texas Dow members so the credit union rolled out a benefits-right platinum card for its members with the best credit scores and a business MasterCard, which comes with a wide range of business-oriented benefits as well as the ability for the firm to set the types of purchases employees can make with the card. Each of these found eager cardholders among Texas Dow members, especially after the credit union worked to build awareness of the cards among its employees and adopted marketing strategies recommended by TNB Card Services.
But Texas Dow's latest card offering is also the most unique. The Onyx card, a card which Wright and the CU tailored to have many of the characteristics of a variety higher end cards, is aimed for the most active and well-heeled card users among the CU's membership.
"What people don't realize is that MasterCard has a pretty wide library of different card benefits and functions that we could pick and choose from," Wright explained. "So we chose some of those we thought our members would most want to have."
Those eventually came to include a revolving base line of credit, plus a nonrevolving pay in full line of credit valued at up to two times the base amount, comprehensive concierge service, price protection and purchase assurance.
With price assurance, if a cardholder pays for the entire cost of a product and within 60 days of the date of purchase they see either a printed ad or nonauction Internet ad for the same product (same model and model year) at a lower price, MasterCard refunds the difference.
With purchase protection, if an item purchased with a new card is lost or damaged within 90 days of purchase, the item will be replaced.
"Obviously this card isn't aimed at all of our members, but it has been a hit with a growing number," Wright said.
Texas Dow only began issuing the card in December but has already gained cardholders through word of mouth. "We haven't even begun to advertise it yet, but we're already picking up members," he explained.
For the $285 million Associated CU of Texas, headquartered in Texas City, tailoring their card program first meant cleaning up the card base to make it more streamlined and cut expenses. Then the credit union introduced more of a sales culture across the credit union's product lines, including cards, according to Keith Tillinger, consumer loan product manager for the CU.
"Like a lot of credit unions, we had more or less ignored the card program for a long time," Tillinger explained. But then the credit union had decided that if they were going to manage it, they should really manage it properly.
Cleaning up the program had meant going through and deleting card accounts that were no longer active so that the credit union was not paying its processor any fees for them. Building a sales culture meant educating credit union staff about the cards and then providing incentive to make sure every member was offered a card.
Tillinger said the incentives ranged from money to including opening card accounts in the CU's advancement structure to fun contests for sporting event tickets and lunches.
Tillinger said management also took on the sales culture, inaugurating weekly meetings at the CU's 15 branches, where the staff could review progress toward sales goals and then starting a weekly conference call where those results could be shared and discussed with the entire CU's leadership.
"We really wanted to get the focus on the card and on making sure our members understood and took advantage of the card," he said. Associated's efforts resulted in a card portfolio of $9.54 million an average balance per account of over $2,100 by year-end 2008.