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CLEARWATER, Fla. — Card Services for Credit Unions is looking back on a healthy year for credit union card programs.Speaking to participants in a recent Web event sponsored by the association, CSCU President Robert Hackney both reported on the strength of credit union card programs and urged CUs not to pull back on credit cards in the continuing economic downturn.Hackney placed credit union card programs firmly in the trend toward electronic payments, a move which is only strengthening. According to The Nilson Report, a service that tracks economic and payment trends, credit and debit cards now account for 45% of the roughly $8.42 billion in payments that Americans make each year, Hackney said, and if ACH and other electronic payments are included in the mix, the figure climbs to 62%.This shift has come in part at the expense of cash but mostly at the expense of paper checks, he noted, adding that “electronic payments have become key to credit unions attracting members and holding them.”Hackney reminded participants that both the credit card industry overall and the credit union card industry in particular have remained strong even as the economy started to dip.According to data supplied by Visa USA for 2007, credit union card programs make a greater percentage of the card income from finance charges than docard issuers overall (75% of the income of CSCU member card programs comes from finance charges versus 64% of the income at other card issuers) and less money from fees.Overall card issuers made 16% of their cardincome from penalty fees (7%), cash advance fees (5%) and annual and other fees (4%), whereas credit unions made only 5% of their card income from all three fees combined.Hackney also reiterated that credit unions need to keep their card losses to fraud in perspective. Both overall and credit union card issuers lose far more money on their card income to charge offs than they do to fraud.“I don’t want to suggest that fraud is not a serious problem or that we should not fight it hard,” Hackney said, “but we should keep in mind that it is not the biggest card expense.”

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