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3 Factors To Consider When Building A Credit Card Product Strategy

Credit unions should focus on product, experience, and innovation while leveraging their established brands and market presence.

Business organizations have often agonized over where to focus first, their products or their brand. Some people believe that over time, their products will eventually define their brand while others believe they should work backward. In the end, we have seen organizations appear where their products and their brands are nearly indistinguishable.

Numerous FinTechs have emerged to serve the specific needs of certain populations with targeted product offerings such as checking and savings, prepaid cards, peer-to-peer payments, paycheck advances, and mobile investing. Even though these FinTechs have now increasingly penetrated the market, credit unions would be remiss to concede on certain competitive segments and should instead, focus on their own product, experience, and innovation while leveraging their established brands and market presence.

When developing a strategy to reach various populations, credit unions should consider integrating three main pillars into their plan:

  1. Tailored Products.
  2. Technology.
  3. Financial Education.

Tailored Products

A credit card can be a fundamental product in engaging individuals looking to build credit over time, eventually leading to increased credit. Individuals might have trouble getting approved for a standard unsecured credit card if their credit score is below 650, either from having a limited financial history or past credit problems.

A credit union might consider a tailored secured credit card product to help members build their credit scores. The member puts down a security deposit for the account, which typically determines the credit limit. Once the cardmember completes a set number of on-time payments, the cardmember can begin to establish a healthy credit history, providing the opportunity to open an unsecured card relationship in the future. Secured cards have become more competitive and appealing with many offering rewards, graduation strategies, and full integration into a financial services provider’s digital infrastructure. These graduation strategies can help with long-term member retention as well, given the positive reinforcement of good behaviors.

One segment for which a credit union might consider a tailored product is small businesses. The small business segment is becoming increasingly important to credit unions that aim for full engagement with their communities. Small businesses want different things from a credit product including:

  • The ability to manage transactions, category spend, and line sizes.
  • Robust reporting with integration into financial management tools.
  • Specialized servicing functions.
  • Flexible underwriting.
  • Tiered rewards or smart tiering of rewards.

Given the wide variety of needs members and small businesses have when it comes to credit cards and credit building products, it’s important credit unions offer a complete suite of credit card products that can meet numerous needs, including building credit, offering rewards, and offering convenient, digitally enabled payments. It might not be enough to simply offer one or two credit card options.

Small Business Segment Highlight

There are 31.7 million small businesses, defined as an independent business having fewer than 500 employees, in the United States. These businesses serve an important role in the economy, not only by giving people jobs but also by spending money small business credit card transactions will exceed $700 billion by 2023.

As credit unions review their credit card acquisition strategies, they should position their product offerings to attract small businesses. Products might include loan products of small business investments, merchant processing capabilities, business-focused checking/debit solutions, and, depending on scale, either corporate or small business payment products. In all cases, adding features to these products that focus on digital first making payment acceptance easier and helping businesses better manage their accounts payable/receivable, expense tracking/control, and cash flow management/forecasting can help a credit union build deeper relationships with small businesses.


Digital technology is rapidly increasing in importance and developing accessible technology is one way for credit unions to eliminate barriers to engage selected populations. As of February 2021, 85% of U.S. adults have a smart phone, making mobile and web features an essential opportunity to reach a broader community. These individuals might not live close to a credit union branch or have easy access to transportation to get to a physical location.

Forty-one percent of consumers say mobile apps are their primary means of banking, making mobile technology a top priority for credit unions. Use of online banking (mobile and web) continues to rise and has increased pre- to post-pandemic by 13%, an 11% increase on mobile apps alone. In 2020, 88% of general-purpose card applications were submitted digitally.

Mobile apps should contain all the capabilities members need to complete critical banking functions without having to visit a branch including:

  • Ability to check balance and make a payment.
  • DIY servicing such as setting travel notifications and enrolling in paperless statements.
  • Options to set up and manage account alerts, request a balance transfer, and view account statements.
  • Fraud monitoring capabilities like transaction disputes and lock/unlock card for transacting.
  • Review rewards earned and easily redeem them.

Financial Education

Access to comprehensive and easy-to understand financial information is an obstacle for many cardmembers, particularly those who have avoided traditional banking. This is an opportunity for credit unions to make financial resources accessible and readily available.

When it comes to financial education in 2020, more than 1 in 10 (13%) U.S. adults admit they are not very or not at all confident in their knowledge of personal finance. This figure has risen each year since 2017 (8% in 2017, 10% in 2018, and 12% in 2019).

Findings from a recent report by Elan and PYMNTS highlight that consumers have a desire to engage with credit unions to build better credit but might not know how, or where, to start. Financial education tools, available online and in app, should cover a variety of topics, including, but not limited to:

  • Cardmember’s current credit score, factors that determine it, and tips to improve their rating.
  • Best practices for when and how to use credit cards to build credit.
  • Ideas on how to manage loans and budget savings.
  • Tips to protect one’s financial information from cybersecurity threats, including a clear outline of when and how your credit union would contact a member for information.

When developing an approach to reach any population, credit unions should consider these strategies, with an emphasis on strong credit card offerings. Whether your credit union is exploring a partnership credit card program to support your efforts, or starting from scratch, Elan is ready to help your credit union succeed and grow.

Learn more in the full report from Elan.


About Elan Financial Services

As America’s most tenured agent credit card provider, Elan serves over 250 active credit union partners. For over 50 years, Elan has offered an outsourced partnership solution that provides credit unions the ability to market a competitive credit card program to their members and outsource most major functions such as marketing, servicing, compliance, underwriting, etc. Elan’s base of more than 2,000 employees are dedicated to helping credit union partners provide the best service possible while reducing the costs and risks associated with managing their credit card programs. For more information, visit www.cupartnership.com.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
April 4, 2022

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