DALLAS-FORT WORTH – If everything stays on track, the $4 billion American Airlines FCU will roll out its credit card program to its 205,000 members in November of this year. When it rolls out the program, which has taken three months longer to put together than the credit union anticipated, it will represent the final capitulation of large credit unions to the broader card culture. American Airlines FCU is the last credit union over $500 million in assets to have started a credit card program. "It has taken us a little bit longer than we expected," said Jim Fry, marketing manager for the credit union. "It has been a crash course for all of us in all aspects of a card program, from the marketing to the service." American Airlines has coordinated its card effort with Certegy, the card processing firm headquartered in Alpharetta, Georgia which will handle its transactions. But that simple coordination did not necessarily make the process any easier, Fry explained, because the credit union remained responsible for the card program decisions. But the card processor's involvement helped the CU adopt many cutting edge marketing and rewards elements into its card program, many of which are not yet frequently found in many bank card programs, Fry added. For example, while some banks and credit unions have started to put rewards programs onto their debit cards in addition to their credit cards, very few have adopted the strategy of allowing cardholders to "household" or pool their rewards program points from both cards. In American's new program, cardholders will earn one point for every dollar they spend on their credit cards and a point for every three dollars they spend in debit card transactions in which they sign to validate the transaction. The credit union's goal was to make it clear to all the members that, no matter which card they used, as long as they were using an American Airlines FCU card and signing for the transaction, they were going to earn some points, Fry explained. And the points go to tangible items, not only travel and vacation items, but also merchandise, and at levels the cardholders can begin to earn points more rapidly. Nancy Thomas, a marketing analyst with the credit union's card program, pointed out another key feature which many members will probably like. All of American's cards will be designated as Platinum Cards, and will carry the full range of Platinum Card benefits, although not all will be priced the same. "We are using a three-tiered pricing structure for the cards to reflect the differences in risk," Thomas said. "But we are going to issue nothing but Platinum Cards." Ondine Irving, a card analysis expert and founder of Card Analysis Services, served as a consultant for American's card program process through Certegy. Although Irving, a 20-year credit union industry veteran, was constrained from speaking about the program by a confidentiality agreement, she gave it high marks for having taken the time to identify the competing cards among their members and to do the research needed to determine what made those cards popular. "This is a benchmarked program from the very beginning," Irving explained. "From right out of the gate, the credit union was aware of how much of a disadvantage they might suffer from being the last card program." Thomas said the schedule now calls for American to roll cards out to its employees to begin to test them in October and then to distribute the cards though a pre-approved letter in November, in time for the Christmas shopping season. Since the credit union would be preoccupied with starting the program, Thomas explained, it would not do any targeted Christmas marketing. But she added that American would definitely be open to similar sorts of marketing arrangements in the future. -

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