As the final pieces of the CARD Act have slid into place, the mainstream media have been touting this legislation as a win for consumers because the intent is to provide consumer-friendly options. Now, add in the recent Pew Health Group Study that notes the CARD Act has made bank-issued credit cards more like credit unions'. This is yet another reminder that we have an opportunity to make credit union credit cards the first choice not just another choice.
We have an opportunity to be the issuer of first choice-the credit card at the top of the wallet. Yes, we're being held accountable right along with the largest issuers for their misdoings, but we can make the adjustments quickly because fundamentally, we've had the right product all along. Credit unions understand that consumers want to pay their bills, so we shouldn't be afraid to reach outside our comfort zone to attract potential cardholders.
Our window of opportunity is limited. Consumers are still upset about how they were taken in by the practices of the largest issuers. They are saying things don't appear to have changed-credit lines have been reduced with little or no reason and multiple offers show up in the mailbox every day. Yet, there are other conversations ready to take the front burner, and consumers will continue to be OK with the issuer they are with-even if they grumble about it every month.
Look at your credit card portfolio. It's time to ask the hard questions. Are you truly offering the best program? Is your rate competitive now, as well as going into the future? How can your processing partner help you build a better, more effective program by leveraging the tools it has available? Or, do you find a partner who has the expertise you need to ensure your membership, and your potential membership, have access to a fair, competitive program with an attractive rate and rewards program?
Don't wait. From the ongoing dialogue I've had with credit unions across the country, there is a tendency to want to see what the consequences of the CARD Act are on their existing portfolio before doing anything. You must believe that the largest issuers aren't waiting. When the chief financial officer of Citigroup announces his company will lose an estimated $600 million in CARD Act-related restrictions, you can bet it is looking at your customers as a way to bolster its portfolio.
Will we let them have our members?
We shouldn't. We have options, and the wait and see method is certainly one of them. But are you willing to be stuck with a noncompetitive program that drags the rest of your programs down? The opportunity is now not three months from now. Don't wait to provide your members with the best credit card product you can give them. They will thank you for it.
TMG Financial Services
Des Moines, Iowa