ST. PETERSBURG, Fla.-Credit unions often do a poor job of marketing their credit card offerings to members, according to one person who believes 2012 offers big opportunity to change that.
Credit unions "are typically very under-penetrated in the credit card space, with less than 20% of members holding the credit union's credit card," noted Kent Potterton, vice president of PSCU Financial Services.
Some credit unions have told Credit Union Journal they plan to take a closer look at credit scores and member relationships in 2012, with a goal of expanding lending to riskier members. But Potterton stressed that credit unions shouldn't give up on A-paper members.
"What we've seen in the marketplace is that with all of the rate increases that the banks typically took, a credit union can go into the market with what they've been offering in terms of rate levels and find that they're significantly competitive at their current rate," said Potterton. "They can still go get that attractive, A-rated risk member at their normal rates and bring a lot of that business into their credit union."
But, added Potterton, don't forget about C-paper borrowers, either.
"Going after some of the higher-risk paper, perhaps with things like more robust income verification" can help CUs extend credit to riskier borrowers, who Potterton said typically earn the credit union a significant amount of interest income "because the higher-risk cardholders tend to carry a balance for a longer period of time and can become your most profitable segment."
Potterton recommended a robust marketing strategy to help increase walletshare. "What we tend to see is that most credit unions don't make a significant enough investment in getting the word out about their attractive rates and attractive features," he said. "They're not doing a lot of direct mail, and obviously the big banks are, and they don't heavily promote credit card offerings on their website or in monthly statement inserts."
Potterton urged credit unions to continue to work to capture member e-mail addresses, which when coupled with other data can help credit unions target specific members for credit card offers.
