Affinity Cards Present New Opportunity to Consider
A new opportunity has surfaced for credit union credit card issuers: the chance to offer affinity-branded credit cards. To be fair, this type of program is not new, but the marketplace has changed enough to make it a reasonable path for credit unions to consider for the first time. And with loan growth hard to come by, any chance to grow the highest yielding asset on the balance sheet is worthy of further thought.
The reason these opportunities are more available now than in the past is that the largest issuers have largely abandoned this space. Before the recession several large banks competed very aggressively for this business. But this business proved more expensive, risky and difficult to manage than the large issuers now desire, and as a result, most of the existing affinity relationships are not being renewed.