The U.S. credit card industry is expansive and growing, topping $4 trillion in volume in 2014, according to creditcards.com. The website also notes credit card applications reached record highs in June 2016, as reported by the Federal Reserve Bank of New York.

And research suggests credit unions are gaining ground in this lucrative market. In fact, credit unions have increased their credit card market share by nearly 50% since the recession of 2008 and 2009, according to creditunions.com.

So what are the most innovative credit unions doing today to keep members reaching for their cards? CO-OP Financial Services has identified several best practices – proven strategies that can help you increase your own success.

1. Proactively manage your portfolio.

Your program manager should be comparing year-over-year benchmarks within the portfolio on a monthly basis, looking at transaction and sales volumes, as well as the number of accounts and account activations. Other important data points to review include outstanding balances (looking for increases), payments volumes/trends (to understand member behavior changes in carrying balances), income trends for finance charges and fees, and past-due account aging.

Review this information thoroughly across each product you offer and determine where you shine – and where you can improve. For example, if transaction volumes are down, that may indicate your marketing efforts need reinforcing. If the decrease is concentrated on revolving accounts, consider promoting these members to a rewards product.

Check the data for red flags as well, such as big paydowns that might indicate cardholders are transferring balances out of your product line. And if you see negative trending over a three- to four-month period, take a deeper look at your portfolio by pulling credit bureau data to see exactly where cardholders may be moving their money. The extended bureau data is invaluable in determining whether your product suite needs tweaking.

2. Analyze member spend trends.

The most successful credit unions conduct a year-over-year comparison on member spending patterns to uncover the natural marketing cycle for their membership. Typically, these cycles revolve around four events during the year when consumers are more likely to tap their credit lines: During tax season, in the summer for vacation expenses, when students head back to school and over the holidays.

Take advantage of these time periods with related promotions, rewards and offers – and if there is an annual event that inspires spending in your community, such as a town fair, include that in the marketing calendar as well. As you systematically market your cards, review the results frequently to determine which campaigns worked – and which didn't.

3. Eliminate underperforming accounts.

It is always best to remove the dead wood from your portfolio, including all accounts that have either been closed or inactive for a year or more. Your processor charges fees for these accounts, so eliminating them from the portfolio can lower your cost basis. Accounts that have not been activated within a reasonable timeframe should be closed as well because they carry with them the processing fee, credit line risk and risk for fraud.

4. Deliver a first-class loyalty program.

According to the 2016 Bond Loyalty Report, rewards significantly influence consumer behavior and brand relationships. Seventy percent of consumers surveyed modify when and where they spend to maximize loyalty points, 81% said they are more likely to do business with a brand offering rewards and 73% are more likely to recommend brands with good loyalty programs. A strong points-based offering has widespread consumer appeal and merchant-funded rewards can reduce operational costs while enhancing your program's value proposition to members.

5. Market your cards at all member touchpoints.

Whenever members open an account, take out an auto loan, visit the website, use your ATM or launch your mobile banking app, keep your card products front and center. And always provide them with easy access to an application, whether they are in the branch, online or using a mobile device.

6. Make sure member-facing associates carry your product.

This is essential because they are your best brand ambassadors. Enroll them in your loyalty programs as well. The more excited they are about your card products, the more engaged your member base will be.

7. Get informed on the many resources your processor offers, and use them.

For example, CO-OP offers a breadth of services to help you elevate the member experience, from fraud and risk management and call center support to turnkey marketing campaigns, regulatory compliance resources, portfolio consulting and the newest, most innovative technologies for payments, security, ATMs and shared branching.

Partnering with a trusted thought leader can transform your business model – and bottom line – while positioning you well for the future. For expert insights on the state of credit payments, view the premium content video below, “The Credit Evolution: A Panel Discussion” available exclusively from CO-OP Financial Services.

Jennifer Kerry is vice president – credit card services for CO-OP Financial Services.

Instant Insights /

Best Practices for Credit Card Programs (and Why They Work)

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