Positioning as 'Exclusive' Provider Has 59% Of Members With Cards
ELYRIA, Ohio-When it comes to credit cards, serving a single SEG is a marketing advantage over banks and even community chartered CUs, attests one single-sponsor shop that has the highest credit card penetration among CUs in the country.
School Employees Loraine County CU's 59% credit card penetration made it no. 1 as of the fourth quarter, 2010. CEO Brent Binkley said by being seen as a benefit to school employees, the credit union and its credit card are not viewed as commodities. "We are exclusive and that is how we position ourselves. It's our niche. The school employees like us, we provide good service and a good product, so why not choose our card?"
The 11,700-member SELCCU has more than 7,000 credit cards in its $11.4 million Visa portfolio, with Binkley saying it is its ambassador program that paves the way. "We have an ambassador responsible for every school-and a director of membership who runs that program-out promoting the credit union. They work very hard to position the credit union as a benefit."
Binkley acknowledged that many community chartered CUs, and even banks, partner with companies, but contended those ties are not as strong. "Our credit union is not seen us as just another vendor."
All of the elements of the credit union's Visa program play a role in the success, Binkley added. Service, from tenured employees well-known by school employees, has members hanging onto their cards and telling others about them, Binkley said. "We have more of a personal touch than the big guys. A member can call in and talk to any one of our financial services reps about their credit card. And our Visa administrator has been with the credit union for 20 years, so a lot of the school employees know him."
Keeping It Simple
Those relationships have come in handy for members when they ask the credit union for special assistance with their credit card. "For example, if members need a temporary increase on their credit line because they are making a special purchase or are in the middle of an emergency, our members know we will often grant their request," Binkley said.
A simplified credit card offering has not hurt, either, insisted Binkley. The credit union moved away from having three cards and now offers one Platinum with rewards and risk prices. Rates are 8.99% APY, 11.99%, and 17.99%. The credit union used to offer credit cards as a secondary form of overdraft protection, but discontinued that for new accounts a few years ago. But Binkley said that option was very popular and has contributed to the high card penetration today.
Besides rewards points for purchases, members receive bonus points when they take certain credit union services: share draft (5,000 points), a new loan above $2,500 (2,500), or a new CD for more than $2,500 (2,500). Members can also turn in points for loan discounts or bump up on a CD. Redeeming 5,000 points returns a .25% discount on any consumer loan, a .125% reduction on a first mortgage rate, or a .25% rate increase on a CD.
"Members like that option and use it a lot," Binkley said.