In addition to purchasing a Kindle or a sweet pair of Nikes, consumers may now pursue credit union credit cards on Amazon.com.
In a deal inked recently between the Filene Research Institute and Amazon.com, credit unions can feature their credit card products on the retail giant during its groundbreaking pilot program.
“Under a one-year pilot project negotiated with Amazon.com, credit unions will pay one flat fee to have their credit card listed on the site and be able to take online applications for their cards through the site,” explains Sandra Naylor, Project Manager for Amazon.com.
“Each credit union will also agree to fund a $50 gift card for every Amazon.com consumer that successfully obtains a card through the site application. In exchange, participating credit unions will have a place on a retail web site that currently draws 33% of U.S. consumers once a month and 66% of U.S. consumers at least once a year”.
According to a media release by CUNA, Amazon shoppers can search for their credit union using the site’s online zip code capability. Naylor says that customers will be able to obtain more information on credit cards by clicking on a banner ad.
As with other purchases, Amazon customers will be able to review and rate their experience. The review system will allow consumers to not only see how well rated their encounter was, but also provide and view specific comments surrounding their experience and the product.
During a webinar announcing the new program, Naylor touted the partnership as a way to draw more attention to credit union credit card programs. "Amazon is a way for products that offer great features and benefits to rise to the top and compete with products that have well-known brands and bigger marketing budgets," she said. "Ratings and reviews are a way for them to shine. For a credit union that does not have a large marketing budget, that makes you a force to be reckoned with."
Well Positioned Card Program: Just What the Debt Doctor Ordered?
During a time when credit is sometimes being used as a way of making ends meet, having additional access to a low interest credit union credit card may be just what the debt doctor ordered.
CreditDonkey.com, a credit card comparison financial education web site, recently conducted a consumer study of national credit card usage statistics and the news isn’t good.
Although researchers from the site said that the information is not representative of all Americans, statistics did provide insight into how the average consumer is getting by lately.
One noteworthy insight is that 45% of survey respondents said that gas is their most frequent credit card purchase, however participants said that they could only meet minimum payment requirements each month. Essentially, some people are going into debt to pay for gas.
The comprehensive study examined several aspects of credit card usage and found that 75.2% of those who are considered to be economically distressed can pay only the minimum amount or a little more of their credit card balance each month. Additionally, 62% always or sometimes have to choose which bills to pay and which bills to put off.
Despite the indication that many Americans are in over their head in credit card debt, CreditDonkey.com found that 79% of survey participants said they would recommend their current credit card company to friends and relatives.
One question that was not addressed was what percentage of the minimum monthly amount went to pay off the credit card’s interest rate? Credit union credit card programs are capped at 18%, however bank rates can run amuck, swelling to rates as high as 30% or more. Trying to meet the minimum amount on a high interest rate credit card most likely means that consumers are simply making payments each month on the interest and haven’t even touched their principal balance.
However CreditDonkey.com did say that even though credit card companies are required by law to disclose how long it will take to pay off a credit card balance, a Boston College study suggests that having the payment length spelled out in black in white won’t change behavior.
How Can the Amazon Program Influence Credit Card Behavior?
Perhaps mainstreaming credit union credit card programs on a site like Amazon.com will drive more awareness and traffic to these low interest, low (or no) fee credit union credit card products.
Instead of robotically turning to his or her high interest credit card, the consumer who has been buried in debt might consider opening a credit union credit card while procuring a fresh copy of “Fifty Shades of Grey” on Amazon.com. Only time will tell as the pilot program is set to go live June 30, 2012…stay tuned.
Find out if your credit union plans to participate in the Amazon.com program.