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Consumers Make Credit Union Credit Cards Top of Wallet

Consumers Make Credit Union Credit Cards Top of Wallet

Independent research analytic firm Callahan & Associates’ recent study found that credit union credit card penetration rates have exploded, up 15.3%.

The firm tracked credit union credit card penetration rates for the past four quarters and discovered that as consumer spending and income increased, credit card usage rose as well. In March 2013, the industry credit card usage rate was 32.2%.

Callahan notes that 54% of U.S. credit unions have a member credit card program, with at least 73% offering ATM or debit cards.

Credit Union With Highest Utilization Rate in Lowest Usage Region

Callahan also tracked which regions had higher utilization rates. Although the firm found that credit unions in Massachusetts had the lowest rate in the country, with only 24.8% of members turning to their credit union’s credit card, one Massachusetts credit union was found to have the highest penetration rate nationwide.

According to Callahan’s report, Taupa Lithuanian Federal Credit Union ($21 million, South Boston, MA) has a vast penetration rate of 65.7%, an 82 basis point increase from the prior quarter. This rate reflects a higher number of credit card accounts recently opened. In addition to offering a no annual fee MasterCard with Scorecard Bonus Points, the credit union is currently running a promotion where members who open a new checking or credit card account are given a $10 coupon to use in the SBLCA Lithuanian Kitchen. Additionally, those who open a new debit card receive a $25 coupon to the SBLCA Lithuanian Kitchen.

Mid-Atlantic and Northern States Rank Highest

The region with the overall highest credit card usage was West Virginia with cards being used at a 39.1% rate. Entrust Financial Credit Union’s ($71 million Richmond, VA) penetration rate stands at almost 52% as the credit union offers four types of credit cards including a Rewards Visa Platinum, Classic, Classic Secured or a Student Visa Credit Card.

Following Virginia are South Carolina and New Hampshire with rates of 39.0% and 37.9% respectively. SC State Credit Union ($550 million, Columbia, SC) offers a relationship rewards-based credit card and no annual fees on Platinum, Gold, Classic and Secured credit cards.

In New Hampshire, Service Credit Union’s ($1.7 billion, Portsmouth, NH) new member Tim Oehmsen says he switched from a big bank to the credit union after being exhausted by high fees and poor service. “I highly recommend Service Credit Union,” he says. “I have a debit card with the credit union and have referred co-workers and friends.”

Service Credit Union is currently offering a free “MyCardDesign” debit card service with a new checking account as well as a credit card travel and merchandise, cash back and rewards based program.

Western Credit Unions Represent

On the other side of the country, Mountain America Credit Union ($3 billion, West Jordan, UT) recently reported being ranked among the top 100 U.S. debit and credit card issuers.

"We're excited to be included on this list with other great financial leaders around the nation," said Tony Rasmussen, senior vice president of payments and business services for Mountain America in a press release. "Providing quality products and services to our members is one of our top priorities. We are able to do this by offering our members easy-to-use and convenient debit and credit cards."

Remember--credit unions cannot charge more than 18% on loans, which includes credit cards, with most offering comprehensive rewards and cash back programs. Find a credit union today that meets your credit needs.

By Gina Ragusa
Published July 24, 2013
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