Phil Seely, Envisant
A credit union’s role to nurture member’s financial well-being is of the utmost importance in recent years. Providing products and services that meet all member needs, creating opportunities for financial education, keeping rates low, and value high – it can all feel like a huge task. There are many products and services that can help your credit union’s members thrive. Often shamed in the financial wellness department is one tool that can help your credit union’s bottom line and credit union members alike: the credit card.
How can we, as credit unions on a mission to help consumers improve their financial footing, also encourage them to use credit cards? It can seem at odds with our mission, but the fact is, “credit card debt is reaching new highs every year, up to $856 billion in the fourth quarter of 2021” (Reich, 2022). Consumers are going to use credit cards and so it is imperative we teach them how to use them well.
Including responsible credit card use within financial education is a strong strategy to help credit union members better understand how to use their credit cards while also giving the credit union an opportunity to showcase better rates available at a credit union.
Consider including a best practice for credit card use within your financial education programming and include topics like:
- Advantages of Credit Cards
- Safer than carrying cash, rewards, budget management, building a strong credit score
- How to Use Credit Cards as a Budgeting Tool
- Use for only known expenses that don’t fluctuate month to month so paying the bill on time is not an issue
- Credit Card Rates at a Credit Unions vs bank
- Teach credit union members how to calculate APR
- Share how lower APR impacts consumers over the course of a year
There are countless ways to highlight the smart use of credit cards for your credit union’s members while still helping them on their path to financial wellness. Financial skills are not innate knowledge. People need to be taught how to balance a checkbook, decide on the best account, and how to read credit card offers to understand how they fit within the financial vision they see for themselves.