Executive Summary
More than half of Americans revolve on their credit card balances, lowering their credit scores and depleting their savings, especially when they prolong their indebtedness by making smaller monthly payments than they could.
Credit union members who owe credit card debt are often hidden to credit unions. In this study, Nickels CUSO analyzed a year’s worth of transaction data from members’ primary checking accounts at five participating credit unions to help identify the opportunity for credit unions to grow their footprint in the unsecured credit market and help improve member well-being.
Credit Union Implications
Strategically targeting credit card revolvers to help them shed their card debt is a new and evolving art. The benefits to the credit union—increased loan revenue, expanded debit card use and interchange, and ultimately increased member savings and deposits—are readily apparent.
Among the five credit unions who took part in this study and shared their members’ checking transaction data, the numbers suggest that making refinance loan offers to such members could enable the credit unions to triple their personal installment loan balances while immediately lowering members’ monthly interest costs and shortening their time in card debt.
Download this brief to help your members shed their card debt and improve their financial well-being.
Filene's Center for Innovation & Incubation is generously funded by:
