RANCHO CUCAMONGA, Calif. — When it comes to gaining card marketshare, many within the credit union community say the key lies in differentiation.
But that's easier said than done, pointed out Rita Fillingane, director of research and information for the California and Nevada Credit Union Leagues. "We always try to differentiate banks and credit unions," she said. "But consumers don't always know the difference."
Jeff Russell is VP-strategic development for The Members Group in Des Moines, Iowa, an affiliate of the Iowa league that offers card processing services. He said that while many consumers do know the difference, he is concerned that Congress also may not see the difference.
Similarly, Sean McDonald, director of business development and marketing for $59-million Liberty Savings FCU in Jersey City, N.J., said "the banks are obviously capitalizing on this in a negative way."
A member of the CUNA Marketing & Business Development Council, McDonald said Liberty, which is not forecasting increases in its card pricing, has three levels for its cards-prime-plus 6, minimum of 14.5%; prime-plus 3.25%, minimum of 12%; and prime, minimum of 6%. The CU has 4,000 cardholders, and owns its credit card portfolio. What concerns McDonald is CUs getting lumped in with any negative publicity about banks. "That's always been the challenge for credit unions in general," he said. "Most credit unions were not involved."
But Steve Salzer, chief strategic, compliance and legal officer for St. Petersburg, Fla.-based PSCU Financial Services, disagrees, saying he believes consumers are differentiating between banks and CUs. But he echoes TMG's Russell in one regard. "I think in general Congress does not seem to be differentiating," he said.
Like others, McDonald said it's time for credit unions to start "opening their mouths, making people realize that credit unions are financial institutions they can trust with their best interests in mind. Look at it as an opportunity instead of a challenge to capture a good part of the market share. There are a whole lot of people in Gen X and Gen Y who don't know what a credit union is, and that's a shame."
Salzer said that CUs should focus on explaining the differences between their credit cards, and the programs the banks have.
