Noninterest income has been a pillar of support for many credit unions living in a persistent low interest rate environment, but with rates now likely headed up and more eyes turned toward lending, credit unions can't get distracted and let noninterest income programs slip away – especially for credit and debit cards, pros said. Here are four strategies they said will help keep noninterest income strong in a rapidly changing economy.

1. Take a hard look at recurring payments.

Being “top of wallet” for members' day-to-day purchases is obviously important for credit union card issuers who want more noninterest income. But don't overlook members' recurring payments – they can generate a steady flow of income, TMG Financial Services Product Manager Connie Thienes said.

The trick is reminding members which card to use when they're attaching a card to all those shopping websites and automatic billing programs in their lives.

“Talk to your card members about 'card on file' as often as you possibly can,” Thienes advised. “Include that in welcome kits, in early-month-on-book campaigns and maybe in marketing campaigns. By that I mean remind new card members to be sure to add their new card number to Netflix, Amazon and iTunes, and all the different places now that we keep our card number on file so we can enjoy that convenience of instantaneous purchase.”

2. Get the marketing team focused on effective messaging.

Card programs can significantly bolster noninterest income – if credit unions can get members' attention and make a compelling argument. That's not always easy.

Jan Southern, who is a senior consultant at income advisory firm John M. Floyd & Associates, said direct mail and statement stuffers are probably the least effective ways to go, for example.

“It's costly and sometimes they're read, sometimes they're not,” she said of stuffers. “If it's not going to be read, it's better that it's just printed on the statement. People have a tendency to read what's on their statement versus maybe not read what's stuffed in there.”

Website banners and even text messages can pack more punch in terms of reminding people at the right time, she said.

Jen Davis, who is vice president of SmartGrowth at CO-OP Financial Services, said whatever form the message takes, be sure to get it out there within the first 90 days of opening the account. And be sure it has a strong call to action that makes it easy to take the offer, she added.

“In today's world, you just can't rely on statement inserts to get your message across, because so many people don't get paper statements,” she said. “A lot of people don't even look at their statements, so you have to think about all the different possible audiences and how they like to get their communication.”

3. Make sure rewards programs are competitive.

Rewards programs are why many members use their debit and credit cards, according to a 2016 U.S. consumer payment study by the Columbus, Georgia-based payments management firm TSYS.

“Rewards continue to be a powerful incentive, and were once again ranked as the most attractive card feature on consumers' most preferred credit cards. While many things change with payment offerings and features, consumers still rank rewards as the most attractive feature and a key influencer for using one card over another,” it said. “The percentage of respondents who selected rewards this year was nearly 60%. Cash rebates were almost double the next closest ranked rewards type, and cash rebates are redeemed a few times a year by 30% of our survey respondents.”

Many predicted debit rewards programs would die after the advent of Dodd-Frank, but “people were just wrong,” Southern said.

“It's definitely a what's-in-it-for-me generation,” Davis added. “Having rewards is a good way to drive utilization of anything. So I don't think debit rewards are gone or dead. I do think that they can play into a better overarching strategy. I think for it to really make a difference, you'd probably want to look at more of an enterprise-wide rewards solution where it can play into your credit card and maybe even other accounts within your organization.”

4. Find a way to form more merchant partnerships.

Strong rewards programs typically involve strong merchant partnerships. Some are merchant-funded loyalty programs targeting national or local retailers; others are homegrown, Thienes noted. In either case, the objective is to increase card use.

Thienes' organization, the Clive, Iowa-based TMG Financial Services, recently partnered with an insurer to launch a cell phone protection plan program for members who hold credit union cards in the ATIRAcredit program, for instance. In exchange for using specific cards to pay their monthly phone bills, members get free damage and theft insurance for their cell phones. And the credit unions that issued the cards get more recurring revenue.

Thienes said the insurance coverage competes with similar products from other credit card issuers – many of them national – though her company's product typically has a lower deductible and can supplement other coverage. The returns can be substantial.

“We're finding that our average ticket size for cell phone payments is $150, so you would multiply that by the amount of interchange,” she said.

About 2% of existing cardholders were using their credit cards to pay a cell phone bill when the program launched in February. “We would be ecstatic if we could get that up to 10%,” she added.

The credit unions tell the insurance carrier how many cardholders used a card to pay a cell phone bill in the prior month. They also pay the vendor a negotiated per-transaction fee, she said.

“As our program grows, our revenue is going to grow and so is the revenue of our partner that's providing the insurance,” she said.

The program is just one of a multitude of ideas spawned by noninterest income's persistent role in credit union success.

“I don't know that I've really heard of a bad idea,” she said. “I think totally ignoring recurring payments and card on file is the worst idea, because these are types of payments that are growing. I think they'll continue to grow in importance and if you completely ignore that and don't include that in developing your spend strategy … I think that would be a big mistake.”