Credit Card Balances Expand Through 2018

Delinquency in this portfolio remains the highest for any major credit union loan product.

Credit card loan balances at credit unions nationwide grew 7.5% in 2018, ending the year at $62.4 billion. Credit card balance growth, however, slowed 1.6 basis points compared to 2017. This was the largest decline of any loan product. As the loan portfolio has expanded, the percentage of credit card loan balances to total loan balances has steadily decreased. Credit card loans accounted for 5.9% of the entire $1.1 trillion credit union loan portfolio at year-end 2018, down 8 basis points from Dec. 31, 2017.

Unfunded commitments for credit card lines increased 9.5% year-over-year, indicating that credit unions expanded lines of credit faster than members accessed those lines. As a result, credit card utilization the ratio of outstanding balances to outstanding balances plus unfunded commitments declined 40 basis points over the year to 31.7%.

Credit card penetration rose to nearly 17.6% in 2018 from 17.5% in the previous year. The number of credit card loans across the country increased 5.0% year-over-year to slightly more than 20.6 million by Dec. 31, 2018. The average balance of these loans was $3,022, a $71 increase from the year prior. The share of the credit card market held by credit unions expanded 29 basis points year-over-year to 6.0% by year-end 2018.

Credit card delinquency is the highest of any major credit union loan product and has increased every year-end since 2013. It increased 6 basis points in the past year to 1.35%. By comparison, credit card delinquency for all FDIC-insured institutions was 1.44%. Credit unions also reported an increase in credit card net charge-offs 28 basis points annually to 2.72% as of Dec. 31, 2018. However, this is still considerably lower than the 3.75% net charge-off rate for all FDIC-insured institutions. This difference is even more compelling when taking into account FDIC-insured institutions report delinquency at 90 days, whereas credit unions report it at 60 days.


Callahan & Associates |
Rank Credit Union State 12-Month Growth Credit Card Loans/
Total Loans
Credit Card Loans**
Credit Card Loans**
Total Assets
1 NUVISION* CA 82.32% 5.77% $110,385,874 $60,546,568 $2,296,606,008
2 FIRST FINANCIAL NM 75.26% 2.89% $12,774,542 $7,288,735 $543,612,310
3 PFCU* MI 73.26% 3.62% $12,708,799 $7,334,975 $533,428,290
4 NAE* VA 72.66% 5.55% $5,180,448 $3,000,397 $125,307,464
5 CENTRAL WILLAMETTE OR 62.18% 1.93% $5,037,896 $3,106,268 $312,231,133
6 NEIGHBORHOOD* TX 61.21% 2.20% $12,117,322 $7,516,442 $715,246,878
7 SAG-AFTRA CA 57.85% 6.20% $8,169,504 $5,175,622 $318,437,232
8 SUNMARK* NY 55.15% 5.25% $31,042,068 $20,007,697 $661,641,905
9 WEOKIE OK 42.37% 2.37% $15,978,563 $11,223,439 $1,103,082,660
10 EVANSVILLE TEACHERS^ IN 41.52% 2.79% $36,815,201 $26,015,001 $1,645,027,773

* Merged in the past year. ^Acquired a bank or bank branch(es) in the past year.
** Total credit card balances >$3 Million.

Case Study: A Signature Card Puts The $ In A High-Rewards Program


Alliant Credit Union
Data as of 12.31.18

HQ: Chicago, IL
ASSETS: $11.2B
MEMBERS: 439,028
12-MO LOAN GROWTH: 18.0%
ROA: 0.59%

One Chicago credit union is making a big statement via a simple credit card program that offers high rewards with an annual fee that’s not negotiable.

The Alliant Visa Signature card pays 3% cash back on all purchases with no fee in the first year. After that, members earn 2.5% on all purchases, with no limits, and pay an annual fee of $59.

We’ve lost a few accounts but not many, says Michelle Goeppner, Alliant’s ($11.2B, Chicago, IL) director of credit product strategy. Our Signature cardholders see the value in the rewards is well worth the fee.

The targeted user of the Signature card charges at least $50,000 a year, which equates to cash back of at least $1,500 in the first year and $1,250 thereafter.

Alliant strategists crafted the card to fill a gap identified by members and confirmed in market research: the need for a true cash-back rewards card with no complications.

Nearly 10,000 people signed up for the Signature card in the first 12 months following a soft launch in March 2017, and 87% average 50 transactions a month. They’re part of a portfolio that also includes slightly more than 43,000 Platinum cards and 27,000 Platinum Rewards cards.

That activity helped Alliant grow its total credit card balances by 10.83% in the year after it launched the Signature card. The overall portfolio also performs well. Alliant’s credit card delinquency rate in the fourth quarter of 2018 was 0.55% compared to the 1.81% average for credit unions with $1 billion or more in assets.

Up next for the Signature program is merchant-funded extra paybacks. According to Goeppner, that researchbased feature will pay above the base 2.5% at varying rates. One thing will remain the same, however.

The cash guarantee, the Alliant cards strategist says. No one indicated they want to give that up.

2019 Credit Card Management Series

This three-part session informs and teaches you about the current state of the credit card marketplace, planning and streamlining the annual budget process, and staying relevant in an overly saturated market. Learn how to get access, including 5-years of archives.


May 20, 2019

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