LONGVIEW, Wash. — Lesley Carrell, VP-marketing with the $667-million Fibre FCU, and member of the CUNA Marketing & Business Development Council, acknowledges any pricing advantage credit unions have over banks on credit cards is often eroded by a disadvantage when it comes to awareness.
"That's why we have taken a proactive approach to educate our members that we have never engaged in deceptive or unfriendly credit card practices," she said. "We've run newspaper ads and utilized our newsletter to let members know this. With all the bad press that banks have been getting vis-a-vis credit cards, there has never been a better time to try and grab market share, in my opinion."
Fibre Federal Credit Union is not planning to make any changes to its pricing, and it has been running an ad campaign focused on why it may be time to switch to a credit union Visa card.
The ads pose the question, "Are you fed up with high rates, big fees, and reduced credit limits on your credit cards?"
Fibre has one basic Classic Card that has a fixed rate of 10.5% APR, with no annual fee. The late fee is $15, and the CU is doing away with its overlimit fee. At present, the CU has 12,761 cardholders and holds all cards in its portfolio.
"The fact that 34% of our members have our Visa credit card is a testament to good marketing," Carrell said. "Our main differentiating factors are that we are local - and service your card locally - low cost, with no gimmicks or hidden fees. The no gimmicks or hidden fees seem to be what is attracting new users."
But Carrell understands that some credit unions have had to reprice their portfolios.
"Many credit unions are seeing escalating Visa delinquencies and charge offs," Carrell said. "They may need to increase rates to help offset these higher expenses. Or if they are experiencing extremely high fraud losses-then maybe they need to raise rates. We have been lucky at Fibre and have much lower Visa delinquencies than the credit union average, as well as fewer fraud losses. But should (credit unions) raise rates simply as a response to the CARD Act or because banks are doing so? I think not. Speaking only for Fibre Federal, we are going to keep our 10.5% fixed rate as is until market or portfolio forces dictate otherwise. For years we have not been market leaders in terms of rate. But with rates raising at the big banks our rate is going to become very attractive, which I think will translate into even more market share. Our portfolio has grown about 5% since January, after several years of flat growth."
