Texas Trust Credit Union is helping school districts and making itself more money with each swipe of its Spirit Debit Reward card.
The Mansfield, Texas-based credit union, which donates to schools 15 cents per transaction from its Spirit Debit interchange revenue, has donated $60,000 to four school districts since August, the company noted in an April 24 press release.
Texas Trust limits the donations to $12 per month per card, Jim Minge, Texas Trust president and CEO, tells PaymentsSource. The credit union earns on average 28 to 32 cents in interchange per transaction initiated with the MasterCard-branded card, he says.
Signature- and PIN-debit transactions trigger the donations. From the program’s inception in August through the end of March, cardholders initiated some 405,000 transactions using their Spirit Debit rewards cards, according to the release.
“We have seen an increase in our interchange income,” Minge says.
Texas Trust could provide no specific data to support that contention. However, Texas Trust spokesperson Amber Danford tells PaymentsSource there was a “significant” increase in interchange income in 2011 compared with the previous year.
Credit-union members who have signed up for the card include parents of children who attend the district schools, the students themselves and alumni, says Minge. The credit union has turned the program into an outreach to potential members as well; it has checking accounts available for children beginning at age 13.
Students ages 13 to 17 sign up as the primary signer with a joint owner until they are 18. Debit card overdraft protection is not available for those youth accounts, holders of which may conduct both signature- and PIN-debit transactions, Danford says.
Texas Trust has held contests for high-school students to design cards, with voting on Texas Trust’s Facebook page. One design contest garnered 28,000 votes, says Minge. The winning students get a $250 prize and a seat on the Texas Trust youth advisory council that comes with a stipend of approximately $200 per council member, depending on their projects, participation and service learning, says Danford.
The credit union originally planned to run the program through May, but it is extending it through the summer, says Minge.
Members who wish to have a school- or district-cobranded debit card may open a free checking account and choose a card design. Texas Trust prints and delivers the card the same day, says Minge. The credit union has a Spirit Rewards Meter on its website so the public can track donations.
The Spirit Debit Reward Card is part of Texas Trust's Spirit in Action campaign, which helps high schools to develop a financial education curriculum for students and financial-literacy workshops for students, teachers, administrators and the community. It also helps solicit volunteers for school-related activities, makes financial donations and provides student scholarships.
Credit-union members also may earn rewards for designated schools when opening a checking account or taking out an auto loan, personal loan or mortgage. In 2011, Texas Trust donated more than $150,000 to participating schools, including $20,000 in student scholarships, according to the release.
A community support rewards program is not unusual, Ron Shevlin, senior analyst at Aite Group, tells PaymentsSource. Credit and debit programs across the country often compete to attract customers with creative benefits, he says.
The beneficiaries of such programs should understand, too, that the merchants accepting the card payments are backing the rewards because they pay the swipe fees.
“There is a degree of altruism,” Shevlin says of community-support rewards programs. “They should thank the Walmarts and Targets who really pay for this.”
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