How To Entice Members To Choose Fee Over Free

An account that pays members up to $200 a year in merchant rebates plus unlimited cash back rewards on signature-based debit card transactions has helped members at One Nevada ease into new checking options.

The region of Nevada stretching from Reno to Las Vegas is home to more than 2.5 million residents and has been in the front car of the economic roller coaster for years. In 2011, Nevada had the nation’s highest credit card charge-off rate 9.61%. That fell to 5.71% by 2013, according to Experian-Oliver Wyman Market Intelligence Reports. Nevada’s foreclosure rate in May 2015 one in every 555 loans was still among the nation’s top 10 highest, according to RealtyTrac, but new foreclosures are steadily declining.

An improving economy for One Nevada Credit Union ($756.9M, Las Vegas, NV) means new growth opportunities in Clark, Washoe, and Nye counties, which include the cities of Las Vegas and Reno plus numerous rural towns and communities in between.


Data as of 06.30.15

  • ASSETS: $756,9M
  • MEMBERS: 76,947
  • BRANCHES: 16
  • 12 MONTH SHARE GROWTH: 4.12%
  • 12 MONTH LOAN GROWTH: 10.81%
  • ROA: 1.22%

We’re a member-centric, heavy transaction-based credit union, and we do a lot of debit and credit card transactions, says Steve O’Donnell, senior vice president and CFO at One Nevada Credit Union. We want to take advantage of the recovering economy, and we’ve been focusing on the checking account migrating away from free checking and making sure we are providing value-added checking.

The number of PIN Authorized Visa Debit (PAVD) transactions continues to rise, causing issuers’ debit card revenues to decline. Many of One Nevada’s nearly 77,000 members are still using free checking, but three years ago, the credit union introduced its One Checking Rewards program, which includes a $5 monthly fee, rebates on purchases with more than 50 local merchants, and cash back on signature-based debit card transactions.

We wanted to provide value to our membership, O’Donnell says. A lot of credit unions are migrating away from free checking, and a lot of banks in our area are charging quite a bit of money for a checking account and not adding much value.

Two Rewards Options

With the One Checking Rewards, the credit union waives the $5 monthly flat fee during the first 90 days for new accounts. For a $5 monthly fee, the credit union also offers its standard One Checking account, which includes merchant rewards but doesn’t include the cash back incentive. On both, One Nevada waives the monthly fee if members complete at least 15 signature-based debit card transactions or maintain a $2,000 average daily checking account balance.

Rewards coupons, similar to online Groupons, are available on One Nevada’s web and mobile banking sites. Members click on the coupons to activate the rewards, and the credit union’s third-party partner, Cardlytics, automatically settles and posts the rebate after the member makes a purchase. At the same time, members are eligible for cash back from One Nevada equal to 0.5% on all signature-based debit card transactions.

Many of our merchants are giving 10% of that transaction back, and that means some of our members are getting $200 back a year, which more than pays for the account, O’Donnell says. We’ve been seeing some healthy growth with these rewards, and we’ve been averaging approximately $10,000 a month in payments to members.

Changing Member Behaviors

One Nevada’s s products are aimed at changing behaviors, O’Donnell explains. The credit union migrated inactive checking accounts to the fee-based accounts to give members an incentive to increase transaction activity. For other free account holders, One Nevada has no plans to force them to move to Rewards checking, but a growing of members are choosing the Rewards accounts.

We’re seeing a three to five percent growth rate in checking, O’Donnell says. And we have a great selling point: You can move from a free account to an account that pays you.

To support the state’s recovering economy, One Nevada also offers a New Start Checking account for people with credit problems who have trouble qualifying for a checking account elsewhere. Members must deposit at least $20.00 into a savings account and $20.00 into a checking account and provide proof of employment.

The credit union assesses a monthly fee of $19.50 for 12 months. If the account holder remains in good standing for one year which the credit union defines as no more than three non-sufficient funds paid or unpaid and no loan delinquencies then One Nevada upgrades the member to an account that comes with lower fees.

Read more about New Start Checking on

Similarly, the credit union’s Essential Checking product caters to members who have been laid off or experienced a reduction in hours and have a combined annual income less than $35,000. That account requires a $5 minimum balance and proof of income, but the credit union waives its monthly maintenance fee.

We’re in multiple counties and have a diverse mix of members, O’Donnell says. I’ve seen reports of up to two-thirds of consumers in Nevada have had some sort of credit blemish. This is part of our mission to provide services to the unbanked. And from my experience, credit unions have a unique chance in that space.

According to O’Donnell, New Start is one of the credit union’s most popular accounts. But because One Nevada is continually moving members to better checking options, the number of accounts stays pretty flat.

Looking To The Future

Accounts like these are helping the credit union build lasting, sticky relationships with its members. As of midyear 2015, the Nevada credit union’s year-over-year growth in average member relationship was 4.31%. That’s stronger than the 2.87% and 3.68% averages posted respectively by credit unions with $500 million to $1 billion in assets and all credit unions nationally, according to Search Analyze data on

Looking ahead, One Nevada plans to continue to look for ways to add value to its checking products. The credit union just launched its Rewards program on its mobile banking app, and O’Donnell sees the mobile channel as a foundation for further growth.

We’ll be looking into ways to integrate geo-positioning into our app, so merchants can push notifications to members’ phones while they’re shopping at the mall and let them know about the rewards available to them, O’Donnell says.

September 28, 2015

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