Competition is pushing more credit unions to enhance their credit cards.

Right now, only 700 of the 5,600 credit unions that offer cards also tack on rebates, travel insurance, airline miles, or other bells and whistles, said Keith Floen, senior vice president of the Credit Union National Association's card services group.

But that number will double in the next 30 months, he said, as credit unions try to catch up with their competitors.

"Credit unions traditionally have placed themselves as the low-cost credit card provider," Mr. Floen said. "When the airline packages and points programs came around, credit unions were caught off guard."

Now "credit unions are looking for some way to differentiate their products and add value," said Roxane Hellstrom, vice president of marketing for CUNA Service Group. "More issuers are in the low-rate sandbox now."

With 2,500 clients, CUNA Service Group - a subsidiary of the trade group, Credit Union National Association - is the industry's largest processor.

Universal One Credit Union, Dayton, Ohio, earlier this year offered a purchase awards program through the Madison, Wis., card company. Members earn points they can put toward free flights with a range of airlines and free stays at hotels.

"The market is very competitive, so the more beneficial the card is to the member, the more they're apt to use it," said Jill Maeder, spokeswoman for the $240 million-asset institution.

Teachers Credit Union is looking to jazz up its card offering in October, in time for Christmas shopping.

The South Bend, Ind., institution owns a travel agency through a subsidiary. It plans to introduce a credit card that gives the members points toward agency services, ranging from airline tickets to car rentals.

"One of the things we're seeing is, when we're losing balances on cards it's to enhancement and not the interest rate," said Rick Rice, chief executive.

Similar competitive pressures are causing John Deere Community Credit Union to reevaluate its plain-vanilla approach.

"Essentially, our image in the marketplace has been the high-service, low-fee, low-cost financial services provider," said Michael Harvey, executive vice president of the Waterloo, Ind., group. "But we recognize, competitively, that a number of (rivals) are doing various things with their cards."

In 1996 the credit union will evaluate the possibility of adding enhancements to its card, he said.

But not all credit unions will dress up their cards. Pennsylvania State Employees Credit Union plans to remain simple, said Gregory A. Smith, chief executive of the $943.5 million-asset institution.

"It's a subject we've talked a lot about," he said. "But the bottom line is, we couldn't ever hope to create an incentive program that would make everybody happy."

Instead, the Harrisburg institution periodically sends its card-holding members checks they can use to transfer balances on their affinity cards to the credit union card account, which has a 9.9% annualized percentage rate.

This year-old strategy has accounted for $16 million being transferred to the credit union's card accounts, Mr.Smith said.

"The key is a low rate and no annual fee," Mr. Smith said. "A high percentage of our members carry balances."

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