SAN FRANCISCO – Credit card holders are most loyal to their first card issuers, so credit unions should strive to be the first institutions to put cards in their members' wallets. That is one of the strategies a recent VISA USA research report suggested credit unions try in order to hold onto their cardholders longer. Credit Card Commitment Research is the first report generated from the results of the card giant's 2003 Visa Commitment and Loyalty Study and addresses both general credit card marketing as well as strategies individual issuers could use. "Issuers need a good understanding of why cardholders are committed to certain credit cards and not to others," the report said. "A consumer committed to a particular card is more likely to keep that card and use it. A more profitable customer base results, due to maximized portfolio activity and reduced portfolio replacement costs." Credit unions appear to be particularly suited to take advantage of four of the report's 13 specific recommendations: becoming the first card issuer, cross-selling other CU products, providing superior customer service, and maintaining a focus on their cardholding members. CUs that seek out unbanked and lower income consumers could find a rich vein of new members who have never had a credit card and would be extremely loyal to the credit union for issuing them one. "Commitment [to a credit card] increases with the length of time a card is owned and is highest among owners who still have their first card," the report said. "Therefore issuers should aim to be the issuer of the first credit card owned by a cardholder." Many credit unions would also seem well positioned to take advantage of the suggestion that they cross sell other products to their cardholders. It's axiomatic that cardholders provide an opportunity for CUs to cross-sell other products and services, but less research has been done on the ways cross selling can help further members' commitment to their cards. "Commitment to a credit card is higher if an owner has another account with the issuer, unless that account is another credit card," VISA said. "Issuers should leverage the existing relationship with customers by cross-selling credit cards to customers. Conversely, they should also cross-sell other products to credit cardholders living within that footprint." Providing superior customer service and maintaining a focus on the cardholder would also appear to be credit union strengths. "Customers who agree that their issuer offers superior customer service are committed to credit cards from that issuer," the VISA report advised. "Critical components of customer service include having a memorable phone number to facilitate ease of access, offering accurate account statements, swift problem resolution and simple dispute processes." Two suggestions which credit unions might find more challenging include offering innovative and differentiated products and offering comprehensive and compelling reward programs. Many credit unions lack the resources to differentiate their card offerings or offer comprehensive card reward programs. -

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