Credit union credit card lending has followed its usual, seasonal pattern so far in 2015, but has been, generally, more active this year than it was in the previous two years, according to credit union and card processing executives.
The executives explained credit union credit card receivables generally fall in the first part of the year as consumers pay off their holiday balances built up the previous year, particularly during the fourth quarter. Then, they said, the receivables gradually rise over the year to reach their peak during the fourth quarter and holiday season. That pattern has continued this year, the executives said, but consumers have generally been taking out more cards and spending more than in previous years.
"We don't have the data to say whether members spent more or paid their balances down less in 2015," Card Services for Credit Unions Portfolio Consulting Manager Barney Moore said, referring to the association's card data from the first three month of 2015. "But we are definitely seeing everything on a higher trajectory."
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CSCU is an association of credit unions that process their card transactions as well as other payment transactions with FIS. Moore reported CSCU had roughly 2,300 member credit unions as of the end of 2014.
Moore said compared to 2013 and 2014, credit card portfolios among the association's member cooperatives were up in the first quarter by roughly 10% and that the credit unions with the largest portfolios were seeing even larger gaps between 2015 and previous years.
He also reported that member credit unions were opening new card accounts at a faster rate and offering more balance transfer programs. He said that members have been particularly receptive to balance transfer offers that allowed them to transfer balances at a lower rate – not a promotional rate – and then keep that lower rate for the life of the loan.
PSCU Vice President of Product Management Jeff Carelli said many of the CUSO's roughly 800 member credit unions are seeing much of the same things in their credit card accounts.
"It's almost like the old saying about high tides lift all boats," Carelli said, pointing to how an improved economy and job market had been helping a variety of credit union lending programs, including credit cards.
Carelli said the overall card spending cycle remained the same, with the primary push running from October and into January as the effects of the holiday consumer push lingered past the New Year, but added credit unions had reported seeing a bit of a spike in spending on summer vacations and summer activities as well.
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