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How A Responsible Credit Program Can Enhance Member Financial Stability

Effective management of credit card debt can increase both the cooperative’s business and the member’s financial stability.

After months of economic uncertainty due to the pandemic, the U.S. has been seeing an increase in consumer spending according to The Nielsen Company. Credit unions have an important role to play in helping members find greater financial stability. Already a trusted member partner, credit unions bring value to their members by helping them find financialsolutions and achieve their goals. With the right strategy, your credit union and its members can find a credit card program to be an effective part of moving forward.

Member Daily Living

The convenience and protection associated with credit cards makes them a good fit for new shopping trends. Despite the signs of increased onsite shopping, industry experts are expecting to see higher levels of online spending this holiday season, accordingto USA Today.

Credit cards can also be a necessity in emergencies. Many people are still living on more limited income and may need to pay for unexpected emergency expenses on credit. Yet, at the same time, they may still be dealing with tighter credit limits becauseof recent industry cutbacks. Credit unions know their members. They can reach out to members and work with their credit processing partner to ensure each member has the credit limit needed for emergencies and essential purchases.

Debt Management

Keeping members informed on ways to use credit cards and promotions to improve their debt management is another way to bring greater stability. Emergency expenses and job changes create challenges to paying down new and past credit debt. Consolidatingthis debt onto one card can make managing it easier and less stressful. A balance transfer option gives members the chance to pay down debt so they can start saving. It’salso important to remind members that you’re available to assist them in creating a plan to make the best use of these opportunities.

Early in the pandemic, credit card and other financial companies assisted consumers with relaxed payment schedules and waived late fees. Your credit union can create added stability at this time by offering or continuing helpful breaks like skip-a-paypromotions to help members catch up. Maintaining reward programs is also important to give members more value when they use their cards.

Strategic Partnerships

A well-planned credit program can also enhance the stability of a credit union’s overall portfolio by improving ROA. Yet, interest rate caps, program costs, and fraud can create challenges to offering a competitive rewards program.

The right partner can help a credit union beat these obstacles and customize a program to be the right fit for their members. A partner can handle the implementation and back-end work for credit unions. Partners that offer zero liability and monitoringbring added stability by helping protect against costly fraud. By teaming up with credit unions to build the right reward programs and market them, partners can help build member loyalty. The right partner can help reduce costs and operational burdens,empowering a credit union to offer positive credit program solutions to members.

When it comes to financial stability, the service and close connection between credit unions and their members make all the difference. Your credit union can help members use the convenient benefits of a credit card responsibly as they seek to stabilizetheir financial situation. A good partner can bring greater resources and enhance insights that impact success.

To learn more about resources and opportunities to build your credit portfolio, click here.

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.
November 16, 2020

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