SPRINGFIELD, Mo. — With high consumer awareness hat many issuers are raising fees and rates on credit cards, CU Community Credit Union is seeking to grab share with a special holiday-related offer.
The credit union has lowered the APY on its Visa card on purchases made through Dec. 31. Though this is the sixth consecutive year the $60-million CU has run this promotion, but unlike previous years in its first month it has seen 10% more credit card use compared to the first month of the promotion in previous years.
"We've seen more penetration in this promotion than we have in the past," said VP-Operations Susie Kasterke, who attributed the increase to the opportunity being created by banks and other card issuers raising their fees.
All existing cardholders, and new cardholders who qualify, are being offered a 6.9% APY on its Platinum cards (its standard APY is 9.5%). The rate on its Visa Classic has been cut to 9.9% from 16.9%.
"We think it's important to offer this special rate to our cardholders because we realize that during the holiday season they're making the largest volume of purchases," Kasterke told Credit Union Journal.
While the cards will reprice to their regular rates on Jan. 1, 2010, cardholders will have until March 31st, 2010 to pay off purchases made from October through December 2009. Cardholders at the credit union also aren't charged any annual fees, cash advance fees, balance transfer fees or overlimit fees.
Kasterke said there is an opportunity out there for CUs right in respect to gaining card marketshare, but it requires getting the message out, which she acknowledges is not a credit union strength.
"We need to get out message out that credit unions didn't participate in the practices banks did," she said. "We struggle with getting this message out to non-members. I really think that's key-to get the message out there that we have a consumer-friendly product. I think we're all lumped into financial institutions in general. I think the general public sees us as a bank."
This promotion originally began "so that when a member goes Christmas shopping, they'll pick our card as opposed to their Discover card, et cetera," Kasterke said.
CU Community Credit Union has 6,000 members, 1,300 of which are CU credit card holders.
