Hang on to Your Balances, Improve Your Offerings, Market to the Underbanked!
By Ondine Irving
Credit Cards portfolios have had a rough go at things the past couple of years. Even with all the media attention of credit union credit cards in 2010, credit union card portfolios grew just 2 percent in 2010, while the previous five-year trend was an annual average growth rate of 10 to 12 percent. First with the impact of the CARD Act, followed by the economic issues, high unemployment and housing crisis, many credit unions found themselves ultra conservative with their lending if not hounded by regulations and auditors, especially in the area of unsecured credit card lending. And let’s not forget the Durbin ramifications in 2011, of which the impact is beginning to rear its ugly head, but in an odd way will be shifting more usage and focus back to credit cards.
If credit unions continue to neglect their credit card program, they may find themselves in a situation that may be difficult to turn around. This is not the year to place your program on auto-pilot. This is the year to place your credit card at the forefront of your product offerings.
Expect a Shift From Debit Cards Back to Credit Cards
The debit card and credit cards are the seesaw of the banking payment playground. Sometimes one is up, the other is down and vice versa. In 2012, credit cards will be on the up and credit unions should be prepared for this.