visa ® credit card program management product upgrades limit increases
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VisaVisa®® Credit Card Credit Card Program ManagementProgram Management
Product upgradesProduct upgradesLimit increasesLimit increases
BackgroundBackground
American First Credit UnionAmerican First Credit Union
$614M in assets$614M in assets
76,000 Members76,000 Members
Community charteredCommunity chartered
Visa PortfolioVisa Portfolio
Maintained the traditional card structure: Maintained the traditional card structure: Classic, Gold and PlatinumClassic, Gold and Platinum
No rewards programNo rewards program
17,584 open accounts*17,584 open accounts*
$37.4M in outstanding balances*$37.4M in outstanding balances*
Average balance $2,128*Average balance $2,128*
*As of January 2004*As of January 2004
Digging deeper…Digging deeper…
ClassicClassic GoldGold PlatinumPlatinum
# of accounts*# of accounts* 8,7438,743 5,1315,131 3,7103,710
Total Total outstanding outstanding balances*balances*
$15.6M$15.6M $12.7M$12.7M $9M$9M
Average Average balance*balance* $1,787$1,787 $2,484$2,484 $2,437$2,437
Average Profit*Average Profit* -$25.68-$25.68 $5.75$5.75 $29.42$29.42
*As of January 2004*As of January 2004
Product UpgradesProduct Upgrades
The offer:The offer:
Started March 2004Started March 2004
Upgrade from Classic Upgrade from Classic to Goldto Gold
Number of accounts
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Visa Classic
Visa Gold
ResultsResultsAutomatic upgradeAutomatic upgradeprogram startedprogram started
03/0403/04
ResultsResults
Classic profitability Classic profitability increasedincreased– Jan. 2004: -$25.68Jan. 2004: -$25.68– Dec. 2004: $28.08Dec. 2004: $28.08
Gold profitability Gold profitability increasedincreased– Jan. 2004: $5.75Jan. 2004: $5.75– Dec. 2004: $44.01Dec. 2004: $44.01
Limit Increase and Limit Increase and Balance Transfer PromotionBalance Transfer Promotion
BackgroundBackground
Need to focus on usageNeed to focus on usage
Wanted to increase our average balanceWanted to increase our average balance
Credit limit is a barrierCredit limit is a barrier
PromotionPromotion
Mailed Sept. 2004Mailed Sept. 2004
1% cash rebate on all 1% cash rebate on all balance transfersbalance transfers
Eligible Members Eligible Members were offered a credit were offered a credit limit increaselimit increase
Balance Transfer FormBalance Transfer Form
OnlineOnline
In branchIn branch
Over the phoneOver the phone
Direct mailDirect mail
ResultsResults
Mailed about 14,000 piecesMailed about 14,000 pieces
409 Members did a balance transfer409 Members did a balance transfer
Almost $1.3M in new balancesAlmost $1.3M in new balances
$67,511 in additional interest income$67,511 in additional interest income
569% return on marketing investment569% return on marketing investment
What did we learn?What did we learn?
Perception of card’s prestige matters to our Perception of card’s prestige matters to our MembersMembers
We must continue to offer annual credit limit We must continue to offer annual credit limit increases in order to stay competitiveincreases in order to stay competitive
Balance transfer promotions workBalance transfer promotions work
Continue to focus on usageContinue to focus on usage
Questions?Questions?
Ryan ZilkerRyan ZilkerAVP, MarketingAVP, Marketing
American First Credit UnionAmerican First Credit Union [email protected]@amerfirst.org
562-237-5050562-237-5050
www.amerfirst.orgwww.amerfirst.org