Evaluating Your Credit Card Program


Published on

Learn the keys to an effective credit card program at your credit union. Get ideas for improvement and hear what other credit unions are doing to drive growth. Listen to the live presentation and follow along with the slides at http://www.nafcu.org/NAFCU_Services_Corporation/Partner_Library/Evaluating_Your_Credit_Card_Program_(Podcast)/

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Evaluating Your Credit Card Program

  1. 1. Evaluating Your Credit Card Program The Pros and Cons of an Agent Card Partnership Mike Cebrick Confidential
  2. 2. The Pros and Cons of an Agent Card Partnership <ul><li>Part 1 – Industry Trends </li></ul><ul><li>Part 2 – Why Credit Cards are Important to you </li></ul><ul><li>Part 3 – Creating a successful card program </li></ul><ul><li>Part 4 – Ensuring future success </li></ul><ul><li>Part 5 – If you decide to explore selling: The Pros </li></ul><ul><li>Part 6 – The Cons </li></ul>Table of Contents
  3. 3. The Card Industry Today <ul><li>Today’s cardholders are more interested in card features than in the issuer </li></ul><ul><ul><li>Rewards </li></ul></ul><ul><ul><li>24/7 membership service </li></ul></ul><ul><ul><li>Competitive pricing </li></ul></ul><ul><ul><li>Balance transfer/cash and purchase promotions </li></ul></ul><ul><ul><li>Overnight lost card replacement </li></ul></ul><ul><ul><li>High credit lines </li></ul></ul><ul><li>Industry concentration </li></ul><ul><ul><li>Top 8 issuers have over 85% of the card market share </li></ul></ul><ul><ul><li>Scale efficiencies </li></ul></ul><ul><li>Saturated and volatile market conditions </li></ul><ul><ul><li>Marketing costs are increasing, fraud and delinquency management are challenging. </li></ul></ul><ul><li>Many small issuers are selling and partnering with large issuers </li></ul><ul><ul><li>Small issuers are being pressured by market competition </li></ul></ul><ul><ul><li>Large issuers will pay premium for growth </li></ul></ul>Part 1: Credit Card Industry Trends
  4. 4. Evaluation of Your Card Portfolio and Options <ul><li>Credit cards help strengthen the ties between you and your members </li></ul><ul><li>Daily transaction link with your members </li></ul><ul><li>Ability to cross-sell other services </li></ul><ul><li>Opportunity for profit </li></ul><ul><li>Credit cards must provide good value to as many of your members as possible. </li></ul><ul><li>Product choices and utility </li></ul><ul><li>Service </li></ul><ul><li>Improve competitive positioning and membership penetration </li></ul>Part 2: Why Credit Cards are Important to You
  5. 5. Making Your Card Program Successful <ul><li>Credit unions need to take an active approach to managing their card portfolio </li></ul><ul><li>if they want to succeed and retain their card program. </li></ul><ul><li>Identify resources needed to improve card performance: Investment in technology and expertise. </li></ul><ul><li>Enhance product offerings and pricing: Rewards and promotional pricing options. </li></ul><ul><li>Investment in marketing and activation programs </li></ul><ul><li>Enhance cardholder service: 24/7/365 </li></ul><ul><li>Implement strategies to control risk exposure to fraud and delinquency </li></ul><ul><li>Maintain profitability while controlling costs to operate card program </li></ul>Part 3: Creating a successful card program
  6. 6. Evaluation of Your Card Portfolio and Options <ul><li>National market trends are working against smaller issuers, you must consider: </li></ul><ul><li>Developing and executing a growth strategy to maintain success </li></ul><ul><li>Or </li></ul><ul><li>Partnering with an agent card issuer to gain a competitive advantage. </li></ul>Part 4: Ensuring future success
  7. 7. Exploring a Sale of Your Card Program <ul><li>You are not alone: many credit unions are exploring a partnership option in today’s competitive card market. Here are some of the benefits of an agent card partnership: </li></ul><ul><li>Elimination of all costs associated with operating the credit card program: (processor fees, charge-off, collections, marketing expense, insurance bond on plastics). </li></ul><ul><li>Refocus of internal resources </li></ul><ul><li>Expand cardholder service: (24/7/365 personalized service </li></ul><ul><li>Robust internet capabilities: (dove tail with your web site)‏ </li></ul><ul><li>Enhanced cardholder product options: (multiple rewards choices, competitive pricing promotions, business card option offered at no annual fee or cost to your credit union). </li></ul><ul><li>Improve competitive positioning and strengthen cardholder loyalty </li></ul><ul><li>Your credit union remains in control of your card program </li></ul><ul><li>New card product and partnership is customized for your credit union (your brand and identity is what your members will see). </li></ul><ul><li>Increased revenue: (high premium paid on portfolio and rich ongoing new account and income sharing). </li></ul>Part 5: If You Decide to Explore Selling: The Pros
  8. 8. If You Decide to Explore Selling <ul><li>Choosing the wrong agent card partner, that does not have a focus and commitment to credit unions could result in a disastrous partnership. Due diligence is necessary to avoid these events: </li></ul><ul><li>Loss of control over your card program </li></ul><ul><li>Member dissatisfaction </li></ul><ul><li>Member attrition </li></ul><ul><li>Loss of revenue </li></ul><ul><li>Competitive cross-selling of Bank partners products to your members </li></ul>The Cons
  9. 9. Should You Decide to Explore Selling? <ul><li>Questions </li></ul><ul><li>Contact Info: </li></ul><ul><li>Michael Cebrick </li></ul><ul><li>Senior Director of Business Development </li></ul><ul><li>Alliance Financial Services </li></ul><ul><li>617-796-8888 </li></ul><ul><li>[email_address] </li></ul>