Overall, for the 2,100 CUs with card balances of over $1 million, card balances grew roughly 9% in the first quarter compared to March 2007. This reflects an increase in average per account balances to almost $2,450 and an industry wide increase from $25.3 billion in March 2007 to $28.7 billion as of March of this year.

Those increases helped boost the percentage of credit card portfolios, which grew faster than inflation move from 70% in March 2007 to 75% in March 2008, and hiked CU card assets from 4.35% of overall CU assets in March 2007 to 4.66% in March 2008.

Frank Selker, co-founder and president of Asset Exchange, observed that the rise in the value of CU card assets has made more credit union rethink selling the asset and inspired more confidence in their ability to compete in the card marketplace.

"I was expecting to see a drop in card portfolio sales," Selker said, "but not as much as there has been. But then again, things have been pretty quiet in the market so these numbers would reflect that."

The first quarter was also the first time a credit union that sold its card portfolio and then later returned to issuing credit cards passed the $1 million milestone in portfolio value. In June of 2007 the $118 million Bestsource CU, headquartered in Waterford, Mich., started issuing cards again after selling its card portfolio to Bank of America's FIA Card Services (then MBNA).

Bestsource began by offering its 16,000 members the CU's brand new Platinum Visa Card with a 3.95% introductory annual rate for six months followed by a low, fixed rate. The credit union is processing its new card accounts with Pemco Technologies and the cards carry Pemco's rewards program as well.

NCUA records showed that the CU has opened 559 card accounts in the three quarters since it started issuing again and the card portfolio grew to $1.2 million on balance with almost $2,150 per account.

The $384 million Alliance Credit Union, headquartered in San Jose, Calif., another former FIA client, started issuing cards again in November 2007 with PSCU Financial Services. The CU has since grown its card portfolio to 135 card accounts and just over $81,000.

The wild card on whether CU card performance will continue may depend on what happens with card delinquency and charge offs. Traditionally, credit unions have seen rates of card delinquency sharply lower than the industry at large, but even CUs may not be immune from the economic downturn.

Credit union charge off rates through 2007, for example, remained relatively flat even though CU card assets increased as percentage of overall CU assets. But Selker observed that there might not have been enough time yet for the full impact of a struggling economy and mortgage market to show up in CU numbers.

Credit union card delinquencies are also difficult to track from quarter to quarter because there is not a uniform standard for when a CU might report them to NCUA or when the different processors might report them to the credit unions. More delinquency data as the year progresses will draw a more vivid picture.

Contacted by e-mail while traveling, Tim Kolk, managing partner with Brookwood Capital, a CU card brokerage firm headquartered in Peterborough, N.H., acknowledged the drop in card portfolio sales but expressed optimism for the balance of the year.

"We are definitely seeing an uptick in our consulting clients (those who want to grow, rather than sell), but I never try to see a trend in one quarter of data," Kolk wrote. "I do think, though, that we'll see sales tick up a bit as people get control of their other issues (e.g. mortgages) and refocus on strategic decisions instead of just damage control."

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