Credit unions are hooking up with prepaid telephone calling cards but are having trouble making a connection.
About 40 institutions offer the products through a CUNA Service Group pilot program that started last year. More are expected to offer the service when the Credit Union National Association subsidiary rolls out the product, possibly in the fourth quarter, said CSG product manager Tracy Panko.
Industry figures indicate that credit unions that offer the cards, either for promotions or for sale, shouldn't expect an immediate connection between members and the products.
"So far the response has been ho-hum," said chief executive of Holland (Mich.) Central Trades Credit Union, which has been offering the cards since May. "I read and hear and see a lot about them, but apparently not everyone does."
The $23 million-asset institution has given the cards to members who open certificate of deposit accounts.
Multco Credit Union, Portland, Ore., used the cards in a deposit-raising promotion earlier this year. The credit union gave members a card for every $1,000 they put into savings. The cards "did O.K. - not great, but O.K.," said chief executive Bob Burns.
"Some people have difficulty with the concept," he said. Nevertheless, he is optimistic that they will catch on, and said he plans to use them in another promotion later this year.
The Madison, Wis., trade group is certain the cards are set to explode. A recent CUNA publication said more than 500 phone companies offer the cards, compared to 150 last year. The companies issued more than 130 million cards in the United States last year, and could issue 500 million by 1998.
CSG is offering cards in 10-, 30-, 60-, and 120-minute increments. To use them, cardholders dial a toll-free number and then enter an access code. The phone system then tracks how many minutes the member uses.
Most credit unions contacted for this story used the cards as promotions or incentives, but credit unions can sell them as well, Ms. Panko said.
CSG sells the cards to credit unions for 25 cents a minute; the credit unions sell them for 28 cents to 33 cents per minute, Ms. Panko said.
Using a prepaid card costs less than using pay phones, operator assistance, major long distance carriers, or calling from hotels, according to a recent CUNA publication.
"Members like the ability to use them internationally," Ms. Panko said. "People also give them to their children who are going off to school or on trips."
Indeed, Northwestern Public Employees Federal Credit Union has seized on the connection between traveling and telephones.
"We give cards to people who buy travelers checks," said Richard Macdonald, chief executive of the Cadillac, Mich., institution.
Whether the cards catch on remains to be seen. But Mr. Burns of Multco said he is sold on them.
"If I were traveling on the road, I wouldn't leave home without it - literally," he said.
