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How to Compete in Today's Tough Credit Card Market

posted by Eric Schurr on Tuesday, June 13, 2017

The credit card industry has become increasingly competitive. What was once just a payment method – a short-term loan – is now a full consumer experience threaded with rewards programs, fraud protections and too-good-to-be-true promotional offers. According to creditcards.com, the top 10 credit card issuers are issuing 90% of credit cards in the United States. With these big issuers controlling the marketplace, how can credit union programs compete and continue to thrive?

Establishing successful partnerships is critical, particularly for credit unions that have made the strategic decision to focus on lines of business other than payments.

TMG Financial Services (TMGFS), for instance, has a group of dedicated and knowledgeable employees who manage credit card programs day-to-day. Serving as advisors, these experts provide credit unions analysis and guidance on the credit card portfolio the financial institution owns and manages. The main goal of Advisory Services is true to the TMGFS mission, to help credit unions grow using the credit card program as a growth mechanism. 

And it’s working. In just under a year, our advisors have assisted several credit unions from across the United States to solve a variety of issues they had in growing and maintaining the health of their credit card portfolio. Here were some of the highlights:

  • Assisted a recently merged Kansas credit union with development of their credit card program. Advisors recommended pricing changes that doubled their return on asset and added $350,000 in revenue annually for the credit union.
  • Helped a Washington credit union develop and launch a premier credit card product and developed digital acquisition campaigns for marketing to their newly expanded membership base. Uptake on this new product is running 110% ahead of projections.
  • Drove a 3% increase in card usage for a Minnesota credit union by offering cardmember engagement campaigns.
  • Grew balances by 30% for an Iowa credit union utilizing a credit line increase analysis and corresponding marketing campaign.
  • Managed collections services on an a la carte basis for two of the top-40 credit unions in the U.S.

As we continue our program efforts into 2017, we believe Advisory Services will become even more impactful to the credit unions we serve, helping them to grow and thrive as a result of the revitalization of credit card programs once viewed as inconsequential to the bottom line. While many credit unions may not be able to compete with the top-10 issuers, they can still succeed in providing their members with a top-notch credit card program, smartly run and generating revenue.

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About The Author

Eric Schurr is responsible for emerging product business management and product innovation in addition to overseeing operations, credit and risk functions. Eric also leads product development efforts for all consumer and commercial products and was instrumental in building ATIRAcredit™  ... read more