6 Best Practices for a Successful Credit Card Rewards Program

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Offering a great credit card is one of the best ways a credit union can bring value to its current and potential members. To establish a competitive credit card program, it’s important to consider a variety of factors, including credit line management, late fee assessment timing and banking identification number consolidation. However, when it comes to actually attracting new members to your program, we find that few things are more important than your rewards strategy. 

Here are six steps you can take to run your best rewards program ever: 

  • Establish an annual marketing calendar outlining your plan to promote your credit card program throughout the year. Consider traditional marketing methods along with digital platforms like email, social media and landing pages. 
  • Combine annual percentage rate, usage and education campaigns (i.e., about tokenization, Visa Checkout and credit management—best practices for increasing your credit score, how to use debt, etc.) to keep your card relevant and to make sure members understand the features and benefits of your card.
  • Be sure to set firm end dates for your promotions. We’ve seen many examples in which, during a 90-day balance transfer promotion, 50 percent of the transferred funds came in the last two weeks.
  • Try analyzing the ACH activity of your share drafts to look for card payments to or from big banks, and then target additional marketing to those members.
  • Offer custom programs focused on market dynamics. Consider cash-back redemption options, charitable donation redemption options, advanced reward points scoring on e-commerce sites like Amazon, promotions tied to new locations accepting Visa (like Costco) and redemption options offered by local merchants that have relationships with your credit union. 
  • Continually analyze your card program to determine your areas of need, and tailor your promotional campaigns to directly address those needs. For example, a credit union may be struggling with low card usage. This could be rectified by running a rewards campaign promoting double points.

A great credit card program is essential for a credit union to thrive in the ever-growing financial services industry, yet only 60 percent of credit unions currently offer a credit card to their members. We know that credit card programs can be very expensive to run, especially for smaller credit unions, but there are products available that can help you offer a great credit card to your members with no start-up fees and very little risk to your credit union.

Article by Phil Seely, senior director of portfolio development for LSC.