BROOKFIELD, Wis.-Credit unions are being urged to pay closer attention to a shift in consumer credit card usage.

Nancy White, senior business leader for credit solutions at Fiserv, said card usage data indicates a "new environment" exists for credit cards, one that is changing how FIs can offer the cards profitably. White said card legislation, the economy, and all the anti-bank debit chatter has created more credit card transactors than revolvers.

"An interesting shift has been taking place during this troubled economy," said White, who shared that credit cards are being used more frequently today for daily expenses, but balances are also being paid off each month.

Regulatory pressures have caused many banks to pull back on issuing new cards, and many have reduced existing lines. Consumers are concerned about losing a line of credit they are increasingly dependent upon for daily expenses. "Many are afraid of losing their cards or having their lines cut down," said White. "So they use their cards more-a bit of a use-it-or-lose-it mentality." White believes all the noise related to debit card fees is steering consumers away from debit.

CUs need to rethink their strategies in response to this shift, asserted White, in order to continue generating revenue from card portfolio, while also positioning the card as a key component of the relationship.

Among the recommended strategies:

* Rethink the types of cards offered-instead of one vanilla card, for instance, offering several types of cards with different features.

* Use rewards to drive transactions up. But always ensure the card products are priced and designed to mitigate risk.

White agreed cards that offer multiple types of payment plans for different purchase categories, such as Chase's Slate with Blueprint, play well with consumers. "High transactors like the different billing plans," said White. "You could have a billing plan that allows consumers to pay off consumables each month, and then a separate plan for larger purchases, like appliances."

That approach also allows the CU to compete more favorably against store cards, and offer special promotional rates for larger purchases, such as no interes for 12 months.

"Many consumers like this pricing approach, too, because they can see all of their transactions in one place. Having different payment/billing options on credit cards puts more power into the consumer's hands. They like that and will use your card more, which is what is needed today to keep credit card revenue streams growing."

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