Punching Heavyweight Competition With A Knock-Out Rate

SAN ANTONIO, Texas - In order to boost member debit card usage and separate itself from some heavyweight competition, United SA Federal Credit Union here is increasing dividends for accounts with as little as one penny in an account.

United SA members who sign up for the new Premium Reward Checking program, need to perform a set number of debit card transactions and sign up for electronic statements.

"We are a fairly new community charter. We're in a market with several billion-dollar credit unions. We wanted something to differentiate ourselves, attract new members and deposits," said United SA Marketing Director Karla Sarran.

With its new Premium Reward Checking program, the $207-million credit union's 30,000 members will be able to earn 6.01% for opening or holding accounts from one penny to $25,000.

Members with more than $25,000 will earn an additional 1.01% on everything more than $25,000.

For example, a United SA member with $30,000 in deposits would qualify for a 6.01% on the first $25,000, plus 1.01% on the remaining $5,000.

Sarran said the credit union worked with a local vendor who determined the parameters of the rewards program created specifically to encourage debit card use, regardless of what the competition was doing.

There is no minimum balance to open a Premium Reward Checking account.

"We wanted something that would really get people's attention," Sarran said. "Some banks are offering similar rates, but no credit unions. But their rate is not higher and I believe it's a teaser rate. This is our stated rate."

United SA members need to make at least 10 free debit card transactions each month, access the E-Teller online service at least once and get an electronic monthly statement to qualify for the 6.01% rate.

Sarran said as an added benefit, United SA is offering unlimited ATM charges from foreign machines as long as the member makes at least three ATM transactions each month. United SA isn't even requiring a receipt.

"You can use any ATM in the country and get reimbursed," she said.

Started in early September, Premium Reward Checking spawned 25 new accounts in the first week and 250 more members converted existing accounts into debit card accounts, plus added more cash to get the higher rates.

Sarran said the membership was quick to reply, even if some of them are a bit taken aback.

"They're very excited about it. A lot of people are asking how can you offer 6%?"

Sarran also said United SA FCU expects a "substantial" savings with so many members switching to electronic payments.

United SA Federal Credit Union was founded in 1955 to serve the employees of USAA, a military insurer and financial service provider.