ORLANDO—One credit union at which credit card applications have “skyrocketed” insists CUs can effectively take on the big issuers’ rewards programs.
As CUToday.info has extensively reported, a rewards battle is underway in the credit card space, with major card issuers investing big dollars to beef up their offerings.
“Our applications have skyrocketed, as have our new accounts, and transactions have taken off,” said Andrea Brown, director of marketing at Evansville Teachers FCU in Evansville, Ind., following adjustments ETFCU made in its credit card rewards offering a few years ago.
Brown said the new program, which enhanced points and cash back and added special bonus points throughout the year, sent applications up by 89% in the first year compared to the previous 12 months.
“And our approval rate remained pretty steady at about 65% or 70%,” said Brown. “But what really helped the most, I believe, is that transactions increased significantly, which has given us much more interchange.”
Compare Offers
But it was not just restructuring the offer that lead to the turnaround for the card portfolio, said Brown, who explained that the credit union compared its offering to the big issuers, making sure to show members the “limitations and qualifications” that come with many of the major issuers’ deals.
“When you look closely at the national issuers’ offerings, you find that they just advertise the attractive part of their program and don’t tell you about the hidden things—not the activation requirements or limits on spend, for example. There is a lot they are not putting out there,” said Brown. “My job as a credit union marketer is to find these things and make them clear to our members. Make things very transparent, and when you do, and you have a good offer yourself, you will win your members’ business.”
Brown made the major issuers’ offers perfectly clear to members and to the public on the credit union’s website with a comparison chart that not only breaks down ETFCU’s offer but several of the major issuers’ deals.
Brown acknowledged that not until about 2013 did Evansville Teachers become aggressive with rewards, saying that prior to the change that its rewards offerings were limited and below the market average due to the fact the credit union was in a cost-cutting mode.
Analysts have cautioned that if issuers take a conservative approach with the credit card rewards programs today and don’t spend money to compete, they will eventually see a sharp decline in their portfolio.
What also turned things around for ETFCU was a new CEO who arrived prior to 2013 and decided the credit union would invest in its card programs. Not only did the credit union invest in its credit and even debit card rewards, it partnered with FIS and offered a program that doubles and triples points at different times of the year, changing reward levels based on merchant category, as well. Those regular changes, said Brown, not only keep things interesting for members and address different spending needs, they allow Brown to offer new marketing programs throughout the year.
“That keeps our advertising fresh,” she said.
Combine Points
The credit union also allows members to combine their debit and credit rewards points if they choose.
“Some of our members really like that,” Brown said. “All of their points are in one place and their points add up faster,” she said.
Brown noted that the credit union’s debit rewards program stands out in the market since not many issuers offer rewards on debit. But she believes more issuers, mainly credit unions, will begin offering debit rewards. Debit rewards programs were pulled back by many issuers during the recession, largely by banks.
“It’s a good market to be in now, especially since the banks are not there, and I don’t think they will be coming back here soon,” said Brown.