TAMPA-Credit union members pay hefty fees at foreign ATMs, so why aren't CUs making non-members do the same when using credit union ATMs?
That's the question posed by Bill Lehman, VP of portfolio consulting services at Card Services for Credit Unions, who believes that credit unions need to regularly be reviewing all of their fees as a way to ensure that they're getting all of the non-interest income they can.
"Why are we not charging foreign cardholders as much as our members are being charged at foreign ATMs?" asked Lehman. "We should be feeing them to death... Tweaking those fees by a few dollars can make a pretty significant impact."
The improving economy can help credit unions here, said Lehman, noting that consumers may have fewer qualms about paying higher foreign ATM fees than they did a few years ago.
"Convenience is key," he stressed. "I've paid $2.50 or $3 a number of times as I'm walking through the airport and I need some cash. I think that people are more accepting of fees, because I think our members are more savvy and understand that there's an expense to convenience."
Other Fees To Adjust
Additionally, Lehman believes it would also benefit credit unions to adjust fees on credit card offerings, including late fees. He said that CUs can still keep their fees reasonable, "but I think there's feasible wiggle room to be below the industry average but still make additional revenue."
Lehman also observed that credit unions need to be reexamining their network choices to ensure that merchants can't cut interchange income by routing transactions to lower-cost networks. "That's a huge risk, because a lot of credit unions haven't taken the time to do that network assessment and make sure they've got the right networks on their cards so we can limit the choices merchants have, ultimately preventing a big dilution in interchange income," he said.
Many members may still be tied to using cash for small-ticket items, and Lehman advised CUs to remind members that debit is okay for small-dollar items.
"They can buy their Big Mac at McDonald's and still use their debit card," he said.
