Investing In Card Program Pays Off For CFCU

Published November 05, 2007, 1:00 a.m. EST

Updated August 27, 2020, 1:33 a.m. EDT

2 Min Read

APPLETON, Wis. - Just one year after Community First Credit Union began promoting and actively managing its new credit card program, outstanding balances were up by 43%, as the CU achieved a 32% increase in purchases, and interest income gain of 23%. From March 2006 to March 2007, the CU boosted credit balances from $9.91 million to $14.16 million, and saw purchases rise from $2.21 million to $2.92 million. By the end of May 2007, outstandings topped $16 million for the first time.

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The $916-million credit union had been considering selling its credit portfolio when a consultant recommended they invest in it instead, and predicted it would be their highest yielding loan product, said Cathie Tierney, Community First's CEO.

The credit union decided to take the advice and worked with AdvisorsPlus from PSCU Financial Services, in St. Petersburg, Fla.

"We have added an impressive 100,000 subscribers over the past 12 months due to product enhancements, innovative marketing tools, and our dedicated team of skilled advisers," said David Serlo, president and CEO of PSCU Financial Services.

Community First Credit Union engaged in a comprehensive program that involved reorganizing its card offerings, planning and launching a series of promotions, developing employee incentives and continuously measuring results against pre-set goals.

The credit union reorganized its portfolio into Platinum Visa and MasterCard accounts. Members were notified by direct mail that they could be automatically enrolled in a "Great Rate" Platinum card that offered 8.99% interest or select a "Great Rewards" Platinum card with a higher interest rate that offered a rewards program. The credit union also employed risk-based lending to adjust interest rates to match a cardholder's credit score.

Promotions included: credit-line increases, convenience checks, balance transfers, cash rebates and cash-back options and the ability to use rewards points to buy down services fees. Credit card rates and current promotions were marketed online and in branches through posters, table toppers and buttons worn by employees. The credit union also conducted employee competitions, with financial rewards for teams that signed up the most new accounts. A team of employees recently split a $1,500 cash prize for bringing in the highest number of new accounts during a three-month period.

The credit union's credit portfolio performance has not reached the ceiling yet, Tierney said, and the staff will continue to launch promotions and keep its credit offering competitive in the coming years.

"Credit unions that invest in their credit-card portfolios can successfully compete with national card issuers because members prefer to use our plastics if we offer an attractive package," Tierney said. "We made a moderate investment in our credit program and achieved dramatic results."

FOR MORE INFORMATION

www.communityfirst cu.com