On-Site Coverage: Credit Unions Face Twin Card Challenges
A resurgent market and the popularity of credit union issued credit card is leaving issuing credit unions with the dual challenges, according to a leading executive with PSCU Financial Services.
Charles Fagan, chief sales officer for the payments CUSO, reported that credit union CEOs who have been meeting with PSCU leaders have emphasized their view that their credit card programs are among the places where they see growth opportunity in the mid to near term, but that there is a good deal of uncertainty about how best to manage the risks cards can pose.
Fagan and other credit union and CUSO leaders are attending PSCU's annual member forum.
"A number of our members credit unions have met with out card portfolio consultants and been significantly disappointed to learn that the A and B paper that had been issued their credit card previously has declined," Fagan said. At the same time card issuing credit unions, as a whole, still have low penetration rates for their card programs which makes them a great opportunity, he added.
He also noted that credit unions generally, including the half of credit unions that currently do not issue credit cards, are going to have to start offering cards that fit into their members broader financial strategy more comprehensively. Prior days when credit unions used to conduct periodic reviews of their card portfolios with an eye toward building balances with credit line increases have passed, Fagan commented.
"Americans are still going to have cards and use cards, but they will have them and use them differently and credit unions need to help lead the way on that," he added.