Credit Unions at 8.3% Outpace Banks in Credit Card Growth

As credit unions refocus on their credit card portfolios, they have not only increased balances, but also taken market share from competitors.


Credit card opportunities are expanding for credit unions. Increased balances and market share provides a turning point for credit unions to evaluate their portfolios and refocus on member credit card needs. 

Outpacing Banks
After declining for three years, credit union credit card market share has reached 3.02 percent as of June 2006, an 18 basis point jump from the prior year. While still small, in a market in which 10 institutions hold 90 percent of the balances, credit unions are demonstrating that they can compete. Increased presence in the market has been fueled by steady growth for the last three years.

Credit union growth in the credit card market is outperforming banks’ results. From June 2004 to June 2005 banks grew their credit card portfolios by 13.5 percent whereas credit union portfolios grew by less than half of banks at 5.6 percent. In the past year, however, credit union credit card growth has outpaced banks by almost four times! Bank portfolios grew just 2.2 percent as compared to credit union’s 8.3 percent growth.


Credit Union Opportunity
Credit unions have not traditionally carried a wide-range of credit card products and services. However, as the option to sell credit card portfolios has become more prevalent within the industry, many credit unions are taking a closer look at offerings and services and deciding how to proceed. Here are some options that credit unions have used to rebuild successful credit card strategies:

  • More card options
    • Example: MCT $373M, Maryland
      In addition to its traditional C credit rated classic credit card, MCT now offers two other classic credit cards: a student card and a secured card for first time users. After conducting a membership analysis it was evident that most of the credit union’s new members were under 35 and had little, if any, credit. As a result, MCT introduced both the student card and the first time card to appeal to this market segment.
  • More frequent credit line reviews
    • Example: BCU $1.1B Illinois
      BCU believes that appropriate credit limits are essential for good relationship management. The credit union hired a company to conduct a monthly review of all the credit card accounts based on set guidelines provided by BCU such as risk, balance and behavior. This information determines the quarterly credit limit increase BCU offers each member.
  • Targeted marketing
    • Example: Community First CU of FL $1.1B, Florida
      Community First has more than doubled the number of card campaigns, conducting nine in the past year. Taking into account general member habits, the credit union took a lifestyle approach to its marketing strategy. For example, recognizing member needs post-holiday season, the year began with a balance transfer promotion. In the summer, Community First related the campaign to popular pastimes like travel and home improvement.
With continued focus on credit card portfolio development, credit unions can top the growth of their competitors and capture market share. To compare specific credit union card portfolios to national or peer averages, click here to request a demo of Callahan & Associates’ Peer-to-Peer software



Oct. 23, 2006


  • I commend credit unions who honor their members by providing in-house credit cards for their members. I have several credit cards and rarely use them. I was shocked to read the new terms on my business card - the defaul rate is 32.24% and finance charges accrue as soon as the transaction is posted to my account. Needless to say, that is one card I will never use. I'll stick with my credit union provided card - where I believe they have my best interest at heart - and I feel valued, not derailed by the greed of the BIN owner.
  • I've never been a proponent of selling your card portfoilo, even though credit cards have been the red-headed stepchild of credit unions for years our Members have a need for this product. It is great to see our market share increase. Kudos to all of you who are changing your strategies in this area.
  • This development should add some interesting fuel to the card portfolio debate. The keep/reinvest/sell decision will depend in part on resource allocation and capabilities but it is nevertheless heartening to hear these success stories and how credit unions are tailoring their approaches.
  • Your article does not indicate if there was an increase in utilization at the same time balances increased. I believe that is the true indicator of a successful program. We found that we could grow accounts and balances, but not utilization. It is a very complex subject with no one answer for any credit union. We opted to sell and partner our card portfolio. That may not be the right choice for your CU, but it was ours and it has proven to be the right decision for us.
    Jerry Liudahl, Oregon Community CU
  • Good article. We made a decision 2 years ago to keep our portfolio. We have focused on marketing, products, rewards, points promotions, activation and utilization. We have experienced 12 - 15% growth each of the last two years. A recent survey of our members indicates that our members use our card about 50% of the time, and another bank card 50%. That's not bad. We can compete.
    John Ruby, Bellco, Denver, CO