o Two credit unions found card success with creative, low-budgetcard promotions.

o Each emphasized the use of frontline staff in thepromotion.

o One CU saw its card portfolio double its card balances overthe year of the promotion.

Two credit unions, one in Texas and the other in Michigan, haverecently been recognized for the ways they have used creativity andenthusiasm to rebut the myth that credit unions cannot successfullymanage credit card issuing.

The $178 million MemberSource Credit Union, Houston, and the $75million Community Alliance Credit Union, Dearborn, were among the60 credit unions recognized by Card Services for Credit Unions witha Card Marketing Award this year. CSCU is an association of cardissuing credit unions which process their card transactions on theFidelity National card platform.

“This year we saw some exceptional nominations touting thecredit unions' successes in what can be considered one of our mostchallenging years,” said Bill Lehman, vice president of portfolioconsulting at CSCU. “Our CAMEO winners seized an opportunity tomake their card programs more profitable, and we like to recognizeour credit union members that work hard to grow their cardportfolios.”

CSCU encourages credit unions to take an active approach ingrowing their credit and debit card portfolios. By highlighting theoutstanding results of effective campaigns, the CAMEO awardsprovide an opportunity to recognize high achievers and showcasebest practices for all members.

“We always enjoy spending time with our members, and theexchange of ideas was especially energizing this year,” said RobertHackney, CSCU president. “It's a great opportunity to connect withcolleagues and learn from each other's success.”

Diana Fisher, vice president of marketing for MemberSource,explained that the credit union had decided to incorporate thepopular reality television program “The Biggest Loser” into itscard marketing promotion effort. But instead of dropping weight,the credit union urged its members to become the biggest interestlosers in terms of balances on high interest rate cards by turningto lower rate CU-issued cards.

“We wanted to help make members aware of just how much moneythey were spending on these sorts of higher interest cards,” Fishersaid. “We are proud of our card offering and believed we couldoffer our members a better deal with our cards than those othercards.”

The credit union budgeted $10,000 for the campaign and spent$7,000, Fisher reported. And over the course of the three-monthpromotion (February through April 2009), it saw members open 273card accounts and increase balances by 14%. Fisher thinks that theCU could probably have opened more accounts but, as a rule, it doesnot like to run promotions for too long.

“When I saw the other CAMEO award winners and saw that some ofthem had run promotions for six months, for nine months or more, Iwas a little shocked,” Fisher said. “We like to keep our promotionsshorter than that. [It] lets us keep them fresher and keep ourmembers interested with new things.”

Fisher said the CU was also pleased with how well its effort tobuild enthusiasm for the promotion among its frontline staff hadgone and how well they had been able to cross sell the cards. Thecredit union issued the frontline staff pieces of tape measuresthat they wore around their necks to spark member questions andinterest, Fisher explained.

She also acknowledged that the CU benefited from the overallconsumer awareness of cards and interest rates that was going on atthat time. In fact, the CU reported that the customary balancecycle had been muted in 2009 as the steady flow of balancetransfers even outside the promotion kept coming. That flow droppedoff as the year progressed, however, so that the usual cycle hasreasserted itself this year, Fisher said.

Scott Williams, the chief operating officer for CommunityAlliance Credit Union, scoffed at the idea that May 2008, on thebrink of what turned out to be the worst recession in years, was aparticularly poor time for a CU to launch a credit cardprogram.

“On the contrary,” he said, “it was a great time for us toposition ourselves well with our members who really needed a creditcard product.”

Williams explained that with Michigan having become “the posterchild” for poor economic conditions, the credit union determinedthat its members really needed a card product from the creditunion, one they could trust not to tack on additional fees or abusethem through higher interest rates.

The credit union launched a yearlong promotion campaign aimedprimarily at its 7,000 members in January 2009. The goals of theprogram were to build balances in the card program, help boost cardinterchange and help position the credit union as a member resourcein the current down economy.

Community Alliance combined a 0% APR offer for six months todraw existing balances and double points through its card rewardsprogram for the use of the card for “the necessities of life,”which the CU defined as food, clothing, medical expenses andgasoline. The CU used targeted direct mailings to preapprovedmembers and also advertised the program to nonmembers living closeto the credit union.

The CU budgeted $26,000 for the yearlong campaign and saw itsucceed enormously, Williams reported. Over the course of the year,the CU almost doubled its card balances, moving from $792,598 toover $1.5 million. That was 15% above its goal of $1.3 million andhelped sharply increase the CU's income from card interchange,Williams added.

Williams also reported that the credit unions careful cardunderwriting had been rewarded so far with a significantly lowercard delinquency rate than its peers.

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