The NAFCU Journal November-December 2019 - 23

"You can build a relationship even in a
challenging situation," she says.
The simplicity of First Financial's card
"makes it easy for not only our members to
understand, but our staff," says Vice President/Visa Core Product Manager Vivian
Vega. "It's easy to have those conversations."
Credit cards are "great tools to establish
long-term credit relations" through
everyday usage, says Mastercard's Bedir.
And this is where credit unions rise to
the top. Credit unions "have, literally,
one-to-one relationships with the member base. They understand their needs
better and can customize their offerings."
Plus, trusted vendors can help credit
unions differentiate their credit cards
and seize overlooked opportunities,
says Catherine Klimek, senior counsel
for Securian Financial, whose portfolio of financial solutions includes loan
forms. Applications can be streamlined. Documents can be customized.
Available credit insurance and debt
protection can be used to minimize risk.
Promotions can gear up quickly.
The goal is seamlessness for customers
and credit unions, while maintaining
regulatory compliance, Klimek says.
Credit unions have been performing
many of the same tasks at point of sale
for years, but they could be missing
opportunities to move them online and
into "take-one" fliers, she says.
"Chances are, they're selling credit
protection on the credit card face to
face when a consumer comes into the
branch, but we've seen a lot of credit
unions missing it online," Klimek
says. "We help clients do it in a way
that works with their processes and
our technology, as well as maintaining
compliance with the regulations that
surround those products."

REACHING THE TOP
OF THE WALLET

Texell's existing credit cards serve
the needs of a longstanding and loyal
middle-class membership. But the
credit union saw an opportunity among

the region's more affluent residents
whose needs are different for credit
cards. Branch personnel reported they
were having difficulty selling credit
cards to members, who would instead
pull out their other cards and applaud
their features and rewards.
"They're more interested in putting
spending on a credit card each month
and getting appropriate rewards for
doing so," says Hale, who realized "we've
got a product gap. What can we do to
correct that?"
The correction came in the form of
Texell's new contactless signature credit
card. While rewards constitute some of
the appeal, convenience could be the
bigger draw to consumers accustomed
to paying for their obligations -
everything from utilities to auto loan
payments to streaming subscriptions -
with one monthly payment.
First Financial is "getting there" on
making its card top-of-wallet, Musmann says. Ongoing communications
include seasonal email and digital and
phone campaigns, tailored to spending
habits and practices revealed by data
analysis. The campaigns remind members to take advantage of what a great
card they have, Musmann says. "They
know, at the end of the day, which is the
best credit card in their wallet."

CHOOSING A CARD

When selecting which company to
align with, credit unions have much
to consider. Both Mastercard and
Visa are universally accepted, so that's not
a factor. Instead, credit unions should
consider which company offers the best
deal for them in fees and supports.
Scale determines "the deal you get
back from the networks," notes Hale,
especially for rewards-based cards.
In negotiations, more cardholders
leverage higher interchange fees,
which generate fatter rewards that, in
turn, attract more cardholders.
Fuerstenau advises careful consideration
before offering rewards that would be

THE NAFCU JOURNAL NOVEMBER-DECEMBER 2019

difficult to take away. American 1 once
declined to attach rewards to its debit
card, because it didn't make financial
sense and because "once you're in it,
you're in it."

REVOLVING CREDIT
ON THE RISE

Revolving credit is one area in which
credit unions can see their profits
rise. At Texell, 75 percent of credit
cards carry a balance, and although
not all those cardholders are paying
interest, it is "a huge driver for profitability," says Hale. Running debt on a card,
he adds, is "a personal choice," often
successfully managed by members accustomed to making regular payments.
Revolving credit jumped 8 percent in
May 2019 and is up 4.5 percent on
the year, NAFCU reported in its July
Macroeconomic Data Flash report. The
Consumer Financial Protection Bureau
reported in July that two-thirds of actively
used credit card accounts carry a revolving balance. Once account holders begin
to revolve, revolving continues for an
average of 10 months.
At American 1, algorithms help predict those who might be vulnerable to
delinquencies. Red flags such as the
sudden stoppage of automatic payroll or
a change in purchasing behavior could
prompt a call to the member - not an
unusual occurrence, because the credit
union makes courtesy calls all the time,
Fuerstenau says.
First Financial members pay their
balances as agreed, Musmann says.
Quarterly data analyses reveal those who
23



The NAFCU Journal November-December 2019

Table of Contents for the Digital Edition of The NAFCU Journal November-December 2019

The NAFCU Journal November-December 2019
Contents
Conferences
From the Chair
Washington and Industry Briefs
The Bottom Line
Welcome, New Members
Leading the Charge
Test for Success
Test for Success
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal November-December 2019 - The NAFCU Journal November-December 2019
The NAFCU Journal November-December 2019 - Cover2
The NAFCU Journal November-December 2019 - Contents
The NAFCU Journal November-December 2019 - 2
The NAFCU Journal November-December 2019 - Conferences
The NAFCU Journal November-December 2019 - From the Chair
The NAFCU Journal November-December 2019 - 5
The NAFCU Journal November-December 2019 - Washington and Industry Briefs
The NAFCU Journal November-December 2019 - 7
The NAFCU Journal November-December 2019 - The Bottom Line
The NAFCU Journal November-December 2019 - 9
The NAFCU Journal November-December 2019 - 10
The NAFCU Journal November-December 2019 - 11
The NAFCU Journal November-December 2019 - 12
The NAFCU Journal November-December 2019 - Welcome, New Members
The NAFCU Journal November-December 2019 - 14
The NAFCU Journal November-December 2019 - 15
The NAFCU Journal November-December 2019 - 16
The NAFCU Journal November-December 2019 - 17
The NAFCU Journal November-December 2019 - Leading the Charge
The NAFCU Journal November-December 2019 - 19
The NAFCU Journal November-December 2019 - 20
The NAFCU Journal November-December 2019 - 21
The NAFCU Journal November-December 2019 - 22
The NAFCU Journal November-December 2019 - 23
The NAFCU Journal November-December 2019 - 24
The NAFCU Journal November-December 2019 - 25
The NAFCU Journal November-December 2019 - Test for Success
The NAFCU Journal November-December 2019 - 27
The NAFCU Journal November-December 2019 - 28
The NAFCU Journal November-December 2019 - 29
The NAFCU Journal November-December 2019 - 30
The NAFCU Journal November-December 2019 - 31
The NAFCU Journal November-December 2019 - Test for Success
The NAFCU Journal November-December 2019 - 33
The NAFCU Journal November-December 2019 - 34
The NAFCU Journal November-December 2019 - 35
The NAFCU Journal November-December 2019 - 36
The NAFCU Journal November-December 2019 - 37
The NAFCU Journal November-December 2019 - 38
The NAFCU Journal November-December 2019 - 39
The NAFCU Journal November-December 2019 - Executive Spotlight
The NAFCU Journal November-December 2019 - 41
The NAFCU Journal November-December 2019 - Management Insight
The NAFCU Journal November-December 2019 - 43
The NAFCU Journal November-December 2019 - Compliance Central
The NAFCU Journal November-December 2019 - 45
The NAFCU Journal November-December 2019 - Inside NAFCU Services
The NAFCU Journal November-December 2019 - 47
The NAFCU Journal November-December 2019 - From the President’s Desk
The NAFCU Journal November-December 2019 - Cover3
The NAFCU Journal November-December 2019 - Cover4
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