BIDDEFORD, Me. – When it comes to charging fees for their creditcards, most credit unions have a great story to tell. The problemis that so few of them think outside the box enough to begintelling it, card experts said. One credit union that has started tocarry the message is the $107 million St. Joseph's Credit Union,headquartered in Biddeford. After comparing different ideas forways the credit union could differentiate its card program fromthose of its competitors, particularly the large issuers, thecredit union decided to drop all fees from its credit card program.“We have a strong capital position and we considered this was agood way to serve our members as well as helping them find theirway away from the high-cost, high-fee cards issued by some of thebig issuers,” explained Luke Labby, CEO of the credit union. Labbyexplained that he had run-ins with one of the big issuers soonafter graduating college when he had been on an automatic paymentplan – the issuer had changed the due date on the payment. Thechanged due date and the automated payment plan meant that suddenlyLabby found he was late with a payment, even though he had had theautomatic payment plan in place for months and had never been latewith payments. Then, to add insult to injury, the fact he had beenlate with payments meant he not only had late fees but also faced ahigher interest rate. “Thinking back it just dawned on me that wehave a real difference in a credit card program which doesn't dothose things,” Labby said, “and we should tell people about it.”The move to advertise the credit union's fee-free offer moved intothe family when the photographer that the credit union used to helpprepare the campaign came up with an old photo of Labby's son, aged18 months, with a very unhappy face. “That face and that expressionwas just perfect for our campaign,” Labby said and the credit unionbegan moving forward with the effort. And there are signs themessage is slowly sinking in. As of June 30, the credit union'sClassic and Platinum card portfolio had just over 3,000 accountsand $3 million in receivables, but it was up 5.4% in the number ofcards since December 2004 according to the credit union's 5300reports. Steve Egan, vice president with Certegy, said the cardprocessor was tracking St. Joseph's effort and added that he viewedit as a natural outgrowth of a situation many credit unions share.“Many of our credit unions are already fee-free or almost fee-freein their card programs,” Egan said, “but they just don't talk aboutit a lot or market on it, so that's what's new.” Part of the reasonmay be because the credit card world waxes and wanes on fees inways that credit union cards have not generally had to do, heexplained. “I think the big issuers really got serious about feeincome when they had to make up for falling margins from theaggressive low interest rate offers,” Egan said. “Credit unionsgenerally haven't made those sorts of offers and haven't seen thatkind of pressure.” Sue Chrzan, spokeswoman for Card Services forCredit Unions, the association of credit unions that process theircard transactions with Certegy, observed that a degree of entropyon the part of many credit unions may be part of the problem. “Itjust doesn't occur to them that the fact that they have very lowfees or no fees at all should be something they should use tomarket their card program,” Chrzan said. “We often go fromexecutive to executive in our card workshops and they all say thatthey have low fees or no fees but that they don't market those. Ithink that credit unions have a problem with the idea of marketingtheir card program – it's almost like they pick up the idea morequickly if it's put in the context of member service and makingsure their members realize that about their credit union card.”Chrzan said the only thing that may turn the trend around is moreCUs starting to market their fee-free cards and other CUs seeingthem do it. “I think it may be one of those things that it takessomeone from outside to suggest,” Chrzan [email protected]