TAMPA-USF FCU has introduced affinity debit and credit cards tied to the University of South Florida that it expects will keep members in the fold long-term.
The cards give 30% of the interchange revenue from each swipe back to the university, something USF FCU is willing to give up to retain students once they graduate. SVP Bruce Koehler said the cards aren't viewed as loss leaders. Instead, the objective is to get an attractive affinity debit card into freshman's hands, make them proud of using their university's card, and following graduation keep them using their alma mater's debit card as well as their CU membership.
"Many credit unions are looking hard at cards now for their shorter-term revenue gains. But for us, these cards are more of a long-term strategy," said Koehler. "They are the official cards of the university, very attractive with the school's Bulls logo on it. When students graduate we will target them with the affinity credit card. We know that not many freshmen are in a position to take a credit card."
The $420-million college-based USF FCU's current student member-retention rate is 51%. "These cards also present a great opportunity to promote other products to students as they transition into their first career," said Koehler.
USF CU projects it will distribute 1,500 debit cards in the first 12 months of the program, which launched in the final quarter of 2012. Through February, it had issued 542 cards, 36% of the target. "Response is exceeding our expectations," said Koehler.
The credit card comes with rewards, too-cash back, merchandise, travel, and gift cards. Balances have grown from zero to $700,000.
Running With The Bulls
More than $164,000 in revenue has been given to the university through February, from program guarantees, royalties paid from cards issued, as well as debit and credit card revenue.
The credit union is tied closely to the University of South Florida, introducing a branding campaign tied to USF last year with the help of a student advisory committee. Ten students from USF currently sit on the committee (Credit Union Journal, April 23, 2012). Bullsbanking.com is a website for students and promotes the cards as well as other selected products, such as the CU's auto-buying service.With the help of the advisory team, last year the CU promoted its BullsRunFromBankFees.com microsite that took aim at bank fees, espoused the CU difference and promoted private student loans and credit cards. That campaign has concluded and the site has been taken down.
