PASADENA, Calif. – The $3 billion Wescom Credit Union had a problem in the middle of 2004. Its credit card program, 38,000 cards and $84 million strong in March of the year, had begun to slow sharply. "We had been in the habit of offering card promotions at the end of the year, during holiday times, and balance transfer promotions during the first part of the following year," explained Kathy Warner, Wescom's card services manager. "For a number of different reasons we didn't do that on time in 2003/2004 and I think that hurt us," Warner said. The credit union's standard card promotion during November and December offered 5.9% on purchases made in those two months and 5.9% on balances transferred during January and February. The goal was to encourage card use during the holidays and then to pick up the balances added to other cards as well, Warner explained. In practice, the credit union had found that it had often lost the holiday balances from November and December as members paid down their holiday balances, but that they often held on to the transferred balances, Warner said. So, working with PSCU Financial Services, the card processing cooperative for over 500 credit unions who process their card transactions with First Data, the credit union decided to build on its success with a promotion that offered points in PSCU's CURewards program to new card accounts. "We really wanted to expand our credit card base a bit," Warner said, "so we broadened our pool of members to whom we would pre-approve cards and then we offered 1,000 CU Rewards points to these new card accounts." The results surpassed Wescom's expectations. Where similarly structured promotions in the past had yielded 1,000 new accounts, the new promotion brought the CU 4,000. The CU also began a sweepstake contest for existing cardholders as well as a convenience check promotion. "We try to make each promotion a little different from the last one to maintain cardholders' interest and to drive both loyalty and usage for our cards," Warner said. "While low interest rates appeal to some cardholders, rewards points appeal to others, so it's important to offer both as part of a promotional campaign." Industry statistics show that cards with a rewards program post an average of 23 additional transactions a year, adding about two more transactions per month over cards without a rewards program. All these new card accounts and activity also yielded portfolio success, moving the credit union's card portfolio from $84 million to $107 million by the end of 2004, an amount that surprised even Warner. This has really made us want to reevaluate how we have been handling our card programs and examine whether we have been helping them perform as strongly as we might have," she said. – [email protected]