And then there is the special hinkiness of consumers who might (or might not) be spooked by the threat of further inflation from tariffs and higher expectations of a recession.

The New York Fed released household debt numbers May 13 that showed an overall plateauing or decline in delinquencies for credit cards and auto loans for all lenders. “They’re regaining their pre-pandemic levels and may be leveling off or declining, which is a good thing,” one Fed researcher said.

That’s kinda sorta the same picture available from NCUA data, which CU Times pulled from Callahan’s Peer Suite.

But looking at the fever charts over time, it’s hard to tell if the rising momentum has stalled before a fall, or if it's catching its breath. It’s like predicting the next direction of a toddler on a sugar high.

Let’s take a moment to see how far credit unions have come since they began offering cards.

The Federal Reserve first began reporting on credit union credit card balances in January 1984. At the time, credit unions held just $67 million in card balances, or about 0.1% of the balance on all of the nation’s credit cards.

Their share grew rapidly to 3.4% in 1995. Then it shrank to 2.8% by 2005, a period of easy credit and high household debt to income.

Credit card debt wasn’t the cause of the Great Recession – blame companies that extended mortgages to people who they knew were unlikely to be able to maintain payments, blame the companies that bundled these questionable mortgages into securities and blame the ensuing foreclosure crisis that made it all go kaboom.

Credit unions were there to pick up the pieces, and part of that was extending more credit cards to members. Their share rapidly increased to 6.4% by the start of the COVID-19 pandemic in March 2020.

The increases have been slower since then. Credit unions’ share rose from 6.4% in March 2020 to 6.7% in March this year.

Banks also increased their share slightly to 90.5%, up from 89.9% five years earlier.

Both gained at the expense of finance companies and others.

Credit card trends among credit unions are inordinately swayed by the largest players.

Navy Federal Credit Union held $31.1 billion in credit cards March 31, or 37% of the movement’s total, and the 10 largest players accounted for half. PenFed at No. 2 held $1.9 billion, or 2%.

Navy Federal and PenFed have much higher credit card delinquency rates than most other credit unions. In March, the 60-day-plus delinquency rate was 2.01% overall, but Navy’s was 2.64% and PenFed’s was 3.60%.

The trends, however, have been similar.

Overall delinquencies have been rising for the past three years. Of course, credit cards – being unsecured – always have a higher delinquency rate than car loans and mortgages. But the difference has widened since 2022.

The gap has also widened for net charge-off rates.

Federal wage supports kept charge-offs and delinquencies artificially low during the pandemic, but both began rising in early 2022.

The rise was slow when measuring all loans, but it was much steeper for credit cards, which respond faster to the economic health of members.

In the first quarter of 2022, the credit card net charge-off ratio was 2.04% – just 1.77 percentage points above the rate for all loans.

In this year’s first quarter, the credit card net charge-off rate was 5.33% – 4.51 percentage points above the ratio for all loans.

Net charge-off rates were just under 60% in 2018 and 2019 for all loans and 3.01% in 2019 for credit cards.

Top 10 credit unions held $41.8 billion in credit card balances as of March 31, up 4.7% from a year earlier. They were:

• Navy Federal Credit Union of Vienna, Va., near Washington, D.C. ($190.2 billion in assets, 14.5 million members), which held $31.1 billion in credit card balances as of March 31, up 6.7% from a year earlier.
• PenFed Credit Union of McLean, Va., near Washington, D.C. ($30.6 billion in assets, 2.8 million members), which held $1.9 billion in credit card balances as of March 31, down 15.3% from a year earlier.
• BECU of Tukwila, Wash., near Seattle ($29.5 billion in assets, 1.5 million members), which held $1.7 billion in credit card balances as of March 31, up 3.3% from a year earlier.
• SchoolsFirst Federal Credit Union of Santa Ana, Calif. ($33.4 billion in assets, 1.5 million members), which held $1.3 billion in credit card balances as of March 31, up 8.1% from a year earlier.
• State Employees’ Credit Union of Raleigh, N.C. ($55.4 billion in assets, 2.9 million members), which held $1.2 billion in credit card balances as of March 31, up 1.7% from a year earlier.
• Suncoast Credit Union of Tampa, Fla. ($18.8 billion in assets, 1.3 million members), which held $1.1 billion in credit card balances as of March 31, down 3.6% from a year earlier.
• Mountain America Federal Credit Union of Salt Lake City ($21.2 billion in assets, 1.4 million members), which held $1 billion in credit card balances as of March 31, up 10.3% from a year earlier.
• America First Federal Credit Union of Riverdale, Utah ($22.6 billion in assets, 1.5 million members), which held $1 billion in credit card balances as of March 31, up 8.2% from a year earlier.
• Pennsylvania State Employees Credit Union of Harrisburg, Pa. ($9 billion in assets, 598,050 members), which held $799.8 million in credit card balances as of March 31, down 4.3% from a year earlier.
• Digital Federal Credit Union of Marlborough, Mass. ($12.9 billion in assets, 1.2 million members), which held $693.1 million in credit card balances as of March 31, up 2.2% from a year earlier.

Q&A: Velera SVP, Product Experience & Enablement Cody Banks

Successful credit card programs contain many moving parts, from marketing strategy to security to financial wellness support. Here, Cody Banks, SVP, Product Experience & Enablement for Velera, shares best practices for credit unions looking to boost their credit card programs in today’s economic and fraud environment.

CU Times: In an uncertain economy with continuing high prices on everyday consumer purchases, what do consumers need from a credit card program the most right now?

Banks: There are several key areas consumers consider when looking to a credit card program: Ease of use, flexibility, security and real value. For example, low or promotional interest rates can be attractive for balance transfers and to those who are revolvers (one that carries a balance from month to month via a revolving credit line). A competitive loyalty program using gamification with tangible value, like cash back on essentials, is an important element. Consumers are also seeking rewards programs that do not have any ‘gotcha’ restrictions or delays in cash back.

Flexible payment method options through features like installments (or Buy Now, Pay Later programs), custom due dates or credit limit flexibility are also influencing consumer expectations. These tools can also help with budgeting, allowing consumers to keep track of their spend and pay bills on time. With rising cyber threats, real-time alerts, card controls and added authentication security is critical.

Looking back, we know that 2024 was a challenging year for credit card volumes. As the Federal Reserve is now likely to reduce rates, we expect balances and spending to gradually increase on credit cards. As rates decrease, credit unions have an opportunity to capture balances from other credit cards by offering balance transfers at special rates, as well as big-ticket promotions or extra reward points for using their credit union’s credit card.

This year will also be a good time for credit unions to evaluate members’ credit limits to ensure they are within reason and can support these additional balances and transactions. All of these are foundational, yet critical, elements to keeping consumers loyal.

CU Times: How can credit unions differentiate their credit card programs from those of other institutions’ to meet those consumer needs? 

Banks: Simply put – trust and personalization. By elevating a localized, human-centric, connected card, credit unions are well-positioned to win top of wallet status. This does, however, require targeted investment in digitization, data modeling and a robust rewards offering. This can be achieved through the creation of modern personalized experiences, like campaigns targeting different segments of the membership base for hardship assistance, credit line support, rewards usage and more. This includes understanding how members prefer to be contacted and/or interreacted with and putting data and member behavior to use to serve customized solutions through the channels in which they frequent. The member psychology of personalization – feeling like their credit union ‘has their back’ – will continue to grow loyalty.

Self-serve options can also allow members to interact with their credit union and transact how they so desire. Tools that allow members to ‘set-it and forget,’ as well as innovative solutions like card-on-file, make members’ lives easier and save time. Pushing card credentials to your favorite, recurring merchants results in an improved member experience where services and purchases are uninterrupted.

Rewards programs – such as cashback, travel points or personalized incentives – encourage members to consolidate their financial activities, increasing deposits and credit product utilization. Younger generations in particular are shopping for personalized rewards solutions that meet their evolving needs. Offering a rewards solution that meets members where they are in terms of the personalized offers and a variety of redemption opportunities will attract the consumers who want to get the most from their rewards program. It also helps to increase transaction and card usage. When members have a rewards program that meets their needs and offers easy redemption options, members want to use that card for all of their spend, converting debit spend to credit spend.

Coupled with an effective sales strategy, a credit union can maximize the impact of these rewards offerings by training staff to highlight card benefits and leveraging data to identify cross-selling opportunities. Credit unions should strengthen their portfolios by offering competitive rewards products that drive member engagement and enhance loyalty. Positioning rewards programs as valuable financial tools will allow credit unions to deepen member relationships, increase transaction volumes and boost fee income. This strategic focus not only enhances portfolio growth, but also reinforces the credit union’s role as a trusted financial partner, ensuring long-term member retention and sustained financial performance.

CU Times: What are some specific ways credit unions can incorporate financial wellness into their credit card program?

Banks: Many credit unions are incorporating financial wellness training within their online banking apps, in addition to free credit score tracking, credit coaching and partnerships with fintechs that offer budgeting tools. Programs that allow members to set card controls and limits, providing customized notifications for upcoming payment due dates, high account balances, unusual transactions/purchases, etc., all help provide members with a full 360-view of their accounts to allow for smart financial decisions. This can be coupled with analyzing member transaction data to deliver personalized insights, showing consumers their spending habits and incorporating education to help with budgeting, tracking categories of spend and showing trends over time for where/how members are spending their money (for example, dining out, entertainment, etc.).

Credit Builder programs are great ways to help younger generations start to establish and build credit. To attract younger generations, gamification is key – rewards can motivate consumers and help drive them to change behavior in small ways, such as paying above the minimum due or setting up autopay to not miss a payment.

CU Times: How can credit unions assure their members that they will be protected against fraud when using their credit card, and what tools and features help ensure a positive member experience around fraud mitigation?

Banks: Real-time fraud alerts are table stakes now and serve as valuable tools that can help prevent fraud. It’s also important for credit unions to have a robust authentication strategy from their side to prevent fraud at the time of authentication. This assures members that they won’t have to go through the painful process of having a card reissued due to fraud and having to update their card credentials across all of the places it is stored. This also helps the credit union retain those recurring purchases, as well as the ‘set-it and forget’ type transactions.

As more merchants (such as Netflix) shift to using tokens to store credentials for recuring payments, in addition to your traditional digital wallets (Apple, Google and Samsung Pay), utilizing token fraud tools such as Token Management can enable credit unions to create rules specific to trends they’re seeing and lean into larger data sets to fight fraud upstream, before the card can be tokenized. Using data and insights to monitor members’ account activities, while also layering in larger market trends and insights, is also key.

Consumer-engaged fraud (or first-party fraud) is the most predominant type of fraud happening in the industry today. Credit unions that have seen success combatting this have implemented strategies to educate members and create ways to understand where they may see a spike. Equally important is the need to revisit fraud strategies with an omnichannel perspective. Before an attack happens is the best time to evaluate whether your fraud and risk mitigation portfolio is keeping pace with the expanding fraud landscape.

CU Times: How can credit unions use a credit card program as a mechanism to grow their membership and/or deepen member relationships?

Banks: It is critically important to know your members – whether new members or those that have been members for decades. Utilize your data to see where members are making payments to other large banks to help identify opportunities and utilize that same data from a holistic perspective to send targeted, personalized campaigns. Credit unions have an ability to analyze their member’s data and activity to understand what life changes or experiences they’re going through and personalize their marketing accordingly. For example, they can use MCC codes to identify travelers and serve promotions that align with their travel preferences, including rewards promos and redemption offers; or identify potential new homebuyers and promote cash back to help offset the additional expenses incurred. Effective CMS systems to leverage other relationships the member has – such as auto loans, mortgages or HELOCs, among others – are great ways to deepen relationships. A credit card can be a great start to creating loyalty and converting a single product member into having a deeper relationship.

At Velera, we strongly believe that credit card programs are a huge area of opportunity for credit unions to grow membership. We have seen onboarding for net new members leap forward with lending digitization, of which Velera has been at the forefront. Creating market awareness, coupled with a seamless, digital and easy underwriting opportunity, helps attract new members.