How smaller institutions can grab credit card business back from megabanks
Consumer media often focuses on the card program features and incentives made by major national issuers. That means that offerings from regional and community banks and credit unions receive short shrift even though they may actually be more appealing to many people. Here are three ways to build visibility.
When it comes to credit card marketing, regional banks and credit unions are mostly missing the mark when it comes to attracting existing customers and prospects to their products. Now is a good time for banks and credit unions to reexamine their credit card marketing strategy because historical data tells us people re-evaluate their credit cards during difficult economic times.
In 2011, for example, the Federal Reserve released a post-recession credit participation study showing that 68% of consumers with credit scores below 660 had an average of 3.3 credit inquiries in 2010, and around 30% of those in the top credit bracket (780+) were also evaluating their credit, with slightly under two credit inquiries taking place in the same time frame.
These credit inquiries show that people were increasingly looking for credit solutions during the peak recession years. And, according to Federal Reserve data from 2007-2009, as mass employment, reduced wages and other financial pressures forced many Americans to purchase everyday necessities with credit cards, consumer use of credit spiked nearly 20%. These examples demonstrate that people are likely looking at maximizing rewards, taking advantage of cash back and reducing risks with interest-free financing and other benefits from credit cards today as we experience another economic downturn.
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