Purdue Employees Federal Credit Union has bucked the trend of credit union's selling off their credit card portfolios and instead gone head-to-head with credit card giant MBNA to garner the affinity card relationship with the Purdue Alumni Association.
That the credit union was able to face down one of the largest affinity credit card providers in the country and take a piece of its business away is all the more impressive when you consider that the $450-million Purdue Employees originally wasn't even allowed to submit a bid for the program.
"We're going to be working really hard over the next three years to make this program work," said Bill Connors, president of Purdue Employees FCU. "We proposed the idea to them several years ago. We had asked to bid. They wouldn't let us."
The Purdue Alumni Association has offered its members credit cards for years through a partnership with MBNA according to Connors.
Forging A Deeper Bond
During this time, PEFCU forged deeper ties to Purdue University, the students, employees and alumni association with financial support and on-campus touch points. In 2004, the credit union gave $500,000 to aid construction of golf and tennis training centers.
"Over the last 10 years we didn't have ATMs on campus," he said.
PEFCU now has a campus branch and ATM and is on schedule to donate a total of $800,000 to Purdue's capital fund-raising campaign by 2007.
Connors said PEFCU has become a "constant" in the community through its long-term support and that as a smaller financial institution, it can respond to member demands with customized products and services, all related to Purdue University.
Purdue University alumni can choose either the "slant P" or "Boilermaker Express" logo for their VISA credit card that features an introductory rate of 3.9% for the first six months with a fixed rate of 11.5%.
The VISA cards will offer a cash-back rewards program giving a point per dollar spent, with the unique feature of cardholders being able to pay their alumni club dues, donate cash to their alma mater or buy Purdue University merchandise.
As rewards cash can be used for club dues, PEFCU officials say the card can provide free membership for alumni.
Purdue Alumni Association official Nicki Reas said an extremely large company such as MBNA couldn't offer the personalized service provided by a local, nimble outfit such as PEFCU. Reas also mentioned PEFCU's continuing community and school involvement as contributing factors as well.
"The entire point of the program is to build affinity with Purdue. Our alumni love it," Reas said. "If you were a student, at one point you probably had a PEFCU card."
Not For Alumni Only
Connors said all members can get the new cards, but for those who may not be Purdue alumni, there are other card designs available, as well, featuring local landmarks, such as the county courthouse.
Connors said Purdue Employees FCU will continue creating and mailing member credit card statements, a time consuming task that provides greater control over its own card portfolio.
PEFCU serves 56,000 members with $450 million in assets.
