This Black Friday, it’s all about the credit cards.
In the past, credit unions have tried to capitalize on the outsized spending that happens on Black Friday by offering loans for holiday shopping and cheaper rates on car loans. Others have flipped the Black Friday concept on its head by promoting saving – rather than spending – by offering
This year many CUs are promoting their credit cards by offering extra rewards points or prize giveaways. Executives hope these offers will encourage members to use their cards, rather than their rivals, when shopping to help boost revenue.
This push also comes as credit union members and bank customers say
“Consumer confidence is pretty high now, so we wanted to get on that bandwagon and take advantage of it,” said Amy McGraw, vice president of marketing at Tropical Financial Credit Union, which is promoting its rewards card for Black Friday this year.
Members who use the rewards card from the Miramar, Fla. CU can get five times the normal number of points on purchases made between Friday and Monday. The $712 million-asset credit union has struggled to get members to use its credit card since bringing it back in-house about five years ago.
“We wanted to try something to get our card more top of wallet during this big shopping weekend,” McGraw said. “We’re expecting in South Florida to see quite a big lift for shopping this holiday season over previous years.”
The Flint, Mich.-based Financial Plus Credit Union is also trying to capitalize on Black Friday and Cyber Monday spending this year. Along with 1 percent cash back and a promotion on Visa balance transfers, the institution is also offering to pay off up to $2,000 in credit card debt for one member who takes advantage of the balance transfer deal. Additionally, members who use their Visa Platinum card between Black Friday and Cyber Monday are entered to win a $250 Amazon gift card.
The $530 million-asset Financial Plus has offered Black Friday promos on and off for the last nine years. It is advertising this year’s offer via its website, billboards, direct mail, in-branch signage and more, said Olga Long, senior vice president. This promotion is a continuation of sorts, since the CU has been pushing credit card spending throughout the year.
Long said in an email to CU Journal that credit card spending has been rocky this year as more members pay off debt, but management is hopeful its audience will respond to the offer.
McGraw, who also serves on the executive committee for the CUNA Marketing and Business Development Council, believes that CUs maybe embracing credit cards this holiday season because of the opportunity for both interest and fee income. That’s crucially important with
“There’s greater fluctuation of interest rates than an auto loan or a personal loan, so there’s more opportunity for revenue,” McGraw said. “If you get people to use it, not only are you getting the revenue on the interest, but on the interchange as well.”
Spend vs. save
But credit unions pushing credit card offers face the challenge of simultaneously pushing their plastic while also encouraging members not to take on excessive debt.
“We have credit unions that want their membership to spend in a healthy way on their credit cards and manage their debt responsibly,” said Jessica Smith, relationship development leader at Your Marketing Co., a South Carolina-based firm working with several CUs across the country to craft credit card promotions for Black Friday.
One credit union attempting to walk that fine line is Columbine Federal Credit Union in Centennial, Colo., which worked with Smith on a promotion to boost spending on its black credit card in advance of Black Friday.
“If you spend a certain amount on your black credit card before Nov. 15, you’re entered to win a $500 gift card to spend on Black Friday – or you can use it to pay off part of your credit card,” she explained.
Michigan State University Federal Credit Union in East Lansing is offering the chance to win a $500 Amazon gift card to any cardholders who makes at least five credit card purchases from Nov. 23 to Nov. 26.
“Generally 10 to 20 percent of those who haven’t used the card use it sometime over that weekend,” said Chief Marketing Officer Deidre Davis.
Because in the past the credit union had targeted members who hadn’t used their credit cards within the last three months, Davis said this year’s results may be a bit diluted, “but we still expect inactive cards to see something similar this year.”
Even as it pushes credit card usage, Michigan State University FCU is also offering financial education for members on budgeting for holiday spending. This includes a pop-up shop with drop-in sessions available.
Black Friday has long been the biggest shopping day of the year, but Davis said the credit union may have already had a dry run for this year with Black Friday’s biggest competitor –
“We did a Prime Day promotion in July,” she said. “We understand some people are going to be using credit [and] we would prefer we are top of wallet for them – it’s better in the long run because of the lower interest rate [than cards available from banks].”
