How This Card Giant Crushes My Credit Union

My plastic is now from a big bank, and that might matter to credit unions.

I have to confess. After more than 15 years of writing about credit unions and talking to credit unions and the vendors who serve them, I now have a big bank’s credit card. My credit union’s card service simply falls too short in terms of bells and whistles, not to mention the basics. And this isn’t my first rodeo with a credit union in town. I’m on my third.

So here I want share what I think speaks to a problem. My credit union is not small by industry standards. It has well more than $500 million in assets and more than 100,000 members. It remains my primary financial institution, but now because of stickiness as much as anything else.

When it comes to credit cards, I now use the Venture card from Capital One. I got it because of my travel. The card giant gave me so many points to sign up that it paid for a plane ticket after just a month or two of use. And the two points per dollar I spend is double anything I’ve ever gotten from a credit union card.

Moreover, redeeming my points is super easy, just like the ads say. I simply apply the points to charges on my card the website even lists the travel-related charges I can do that with, including cab rides. That’s a great way to use big data to thwart blackouts and offer choice. And the cash-out option is clear (although at one point per dollar instead of two) unlike the clunky rewards program at my credit union. Thanks, but I have a toaster.

I’m not writing this to promote Capital One, but I do think its use of data diving and slick, intuitive, customer-friendly technology far outstrips what I’ve seen from my own credit unions. And the fact this is happening when the same tools are presumably available to credit unions concerns me.

This topic was on my mind when I got an an email from Capital One telling me I tipped about 50% on a restaurant bill last week and alerting me that maybe it was a mistake or a security issue. It wasn’t a mistake. I had used a gift card and tipped on the whole bill not the remaining balance. But I was impressed, again, with the card issuer’s use of big data to act on information in such a proactive, customer-friendly way.

But wait; there’s more. It’s also easier for me to pay my Capital One bill from my credit union checking account at the Capital One site than it is to simply transfer the funds from checking to credit card account on either my credit union’s app or online site when paying on my credit union-issued credit card.

In fact, my credit union does not even offer that most basic of functionalities. After trying unsuccessfully to pay my credit union credit card online and through the app, I finally gave up. Yes, I’ve called member service. The reps have consistently known less than I do about their own gear. And I’m not talking about code here. Just functionality that any digital native would fully expect them to offer and understand.

I like to actively manage my accounts, but I’ve reverted to waiting for bills in the mail and writing checks made payable to a generic entity titled something like Card Services Inc.

I understand my credit union uses a third-party provider, but it has done nothing to make the member experience seamless, much less white-label it. That can be off-putting to members who aren’t in the biz, so to speak.

Even more problematic, I know who my credit union’s card and core processors are, and I know those platforms can do much more. For example, a couple years ago, a branch manager told me I couldn’t make my car loan payment in advance online because IT hadn’t turned that on yet. Months later, it still wasn’t on.

So why am I writing this? Because I’m also a stakeholder in our industry. I make my living in it, I participate in it, and I believe in its principles.

Most people don’t care who provides the technology. That’s rightly irrelevant to the member. The service is what matters. I wonder why so many members put up with these shortfalls at my credit union and the others I’ve been through. How long before these members, too, become customers at some big bank?

October 28, 2015

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