CLEARWATER, Fla.-At the average credit union, just 14% of members carry its credit card.
But that statistic is not the only reason to look in-house to bolster the card portfolio, points out CSCU. Of those who do carry their credit union's card, just 40% actually use it, CSCU reports.
"It costs $37 annually for each inactive card," said Melissa Oxendine, senior portfolio consultant, during a CSCU webinar on managing credit card portfolios. "So it's always important to have strategies to get more transactions out of those who use your card, but you have to address those who never activate the card."
Oxendine advised credit unions to carefully review credit card purge criteria and purge quarterly reports. "Make sure your blocked and statused accounts are purging correctly. Review your monthly reissues-evaluate your reissue criteria. Maybe institute a three-year expiration."
Oxendine also suggested adding incentives such as an activation and first-usage reward."
The biggest opportunity, Oxendine reminded, comes from targeting the more than 80% of members who don't carry the credit union's card. Rewards are a good place to start, she said.
"Overall, rewards-either merchandise or cash back-improve card usage throughout the entire portfolio," Oxendine said. "Rewards cards now make up more than half of all credit cards, and about 80% of money spent on a credit card. Consumers say rewards are the second most important reason for choosing to apply for a specific card, behind no annual fees and ahead of low interest rates."
Oxendine noted that credit cards offering rewards are shown to increase the average monthly spending of a consumer by 91%, and more than one-third of consumers choose which card to use based on maximizing rewards.
