Credit & Debit Card portfolios show solid increase

Nutmeg State Financial Credit Union (Rocky Hill, CT) wanted their members to have an extra happy holiday so they gave them double rewards points on credit card purchases during November and December.

Nutmeg State Financial Credit Union (Rocky Hill, CT) wanted their members to have an extra happy holiday so they gave them double rewards points on credit card purchases during November and December.  

John Holt, President & CEO, says the credit union’s More-than-Free Checking accountholders also received double the cash back on debit card transactions during this same period.

Being top-of-wallet is the goal

“The purpose of this promotion is to keep our cards at the top of the wallet,” says Holt. “When you’re out shopping for hours or spending time shopping online, we don’t want any hesitation when it comes to deciding which cards to use.

“We know how much our members rely on their debit and credit cards, and we really want to reward them for using our services. 

Holt says the credit union frequently provides special rewards offers for credit cards; however, this is the first time it has run an offer in conjunction with its debit cards.

“We consider both our checking accounts and credit cards to be very sticky products. Our members rely on these cards to do all their transactions.  It’s the primary way they interact with us.  

“Holiday shopping is expensive, so many people are relying on both checking accounts and credit cards. With this promo, we’re rewarding the member regardless of the way they choose to spend.”

Since the holidays are loaded with advertising clutter, the credit union had to be strategic with its marketing. 

“When marketing to existing members, we work hard to communicate across a wide variety of channels. The targeted communications reach members by email, direct mail, through our relationship management tools in the branches and call center, our electronic channels and more.”

Targeting prospects with digital & social media

Holt says that to reach non-members, the credit union relies heavily on digital and social media marketing because the targeting capabilities are so precise. 

“Our target for non-members tends to skew younger. It’s where we have the most success with conversions. And our ‘Banking Awesome’ advertising campaign is young and funny, so we do well in bringing in younger members. With that said, our products are very appealing so we do well with all age ranges.”

Holt reports that the feedback from the promotion has been extremely valuable. 

“For example, I’ve been hearing that members appreciate the gesture more than anything. Even if they don’t get extra rewards or cash back, they’re expressing appreciation that the credit union is interested in doing these offers. 

“After all, the banking industry is seeing more and more checking accounts add fees, and credit cards continue to become more and more expensive. 

“Our members are happy our checking accounts are free and our credit cards are very reasonable. Adding these extra rewards just sweetens the deal.”

Plus, the credit union is seeing direct results from its efforts. “We’ve been promoting card usage a lot this year for both debit and credit cards, so the usage is up overall for both.” 

Credit Card portfolio is up 11 percent

Holt says the credit union has had a net growth of credit cards of 2 percent for the year so far. “But the total credit card portfolio balance is up 11.8 percent and the interchange income is up 7.8 percent from this time last year.

“At midway through this promotion, we were seeing a 16 percent increase from previous months of credit card swipes in the qualified holiday shopping categories, so we know people are using the card when they are holiday shopping.” 

Debit card growth is up 4 percent

On the debit side, the credit union has had 4.7 percent net growth for its More-Than-Free checking accounts since this time last year, says Holt. “The qualified Debit purchases that qualify for cash back are up 15 percent from this time last year. So, even if you factor out the growth of the accounts, the activity has gone up for sure.” 

Holt reported that with this kind of success repeating this offer in the future makes sense. 

“The costs of these types of promotions are necessary to stay top-of-mind with our members. Whether for holiday shopping or for everyday expenses, we want to ensure our cards are first in line to be used. 

“These promotions help create a meaningful dialogue with our members and really help build relationships, which is what it’s all about for us.” 

Source: John Holt, CEO of Nutmeg State Financial Credit Union, Rocky Hill, CT; phone (860)513-5000; e-mail: alisa@alliancesbyalisa.com. 

John Holt, President & CEO
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