“The Pursuit of the Ultimate Credit Union Credit Card Program”
Part 2: Effective Growth Strategies – Credit-Line Management (PART 1 HERE)
Has your card program growth stalled? Have you been advised you need to implement costly acquisition and activation campaigns in order to increase balances? As I have stated in the past, the profitability from card programs is driven more by balances (finance charge income) than by usage (interchange) and total accounts (expense). The formula is quite simple: increase credit lines (responsibly) and card loan growth can and will occur.
As a whole, credit unions are very conservative with their card programs and unsecured lending. I don’t like to compare the credit union industry averages to bankcard programs, because a credit union’s card profitability and operating models are very different from the major bankcard issuers. Yet the single similarity is the consumer’s perception; a strong credit line can make the difference between the “go-to card” and the “backup card.”
Average Credit Lines
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