Studying Credit or Debit Card Data
By Joyce Moed

RANCHO CUCAMONGA, Calif.–There are three main goals of studying credit or debit card data, said one field expert.

"The three big goals are penetration, activation and usage," said Caroline Lane, SVP of business development and marketing for CO-OP Financial Services, here. "For penetration, you want to ask ‘Why do more members not have your debit card?’ Usually it’s because they have a checking account.

"For activation–once you’ve actually issued a card, you don’t want it to just sit somewhere," Lane added. Lane said this can be avoided by offering a promotion at the time of card issuance, such as offering a gift card for activating the card. "It can be simple and inexpensive," she said.

"The big daddy is usage," Lane stressed. "If the average use for a member is 12 uses per month, wouldn’t it be great if that number moved to 15?"

CO-OP’s new portfolio optimization tool, known as CO-OP Revelation, can help CUs raise that number, Lane said.

"It helps a credit union identity merchants where members use their debit cards often," she said, such as the grocery store. In those cases, a helpful hint would be to add a blurb on members’ monthly statements encouraging use at that store, Lane said. She also suggests a "spend and get" campaign, where members who spend a certain amount on their debit card each month get something in return.

Studying credit data is difficult for credit unions to do without the help of a company that specializes in it, Lane noted.

"It can be daunting," she said. "The data can be overwhelming. Without our tool, it is overwhelming. You need some kind of analytic tool to see where the diamonds in the rough are."
Trying to do it on their own can be very discouraging, said Bill Lehman, VP of portfolio consulting services for CSCU.

"It’s important to have processors that can help," he said. "It would be a challenge for most credit unions–not get the data, but to analyze it. I think they are capable of getting the scores. It’s then–what do you do with it?"

Mitch Raymond, VP of product development for TNB Card Services, in Dallas, agreed.
"I really have not heard any credit unions doing this one their own," Raymond said. "We have the tools, here."

And with those tools, the information can credit unions can gain can be very helpful, he said.
"At the end of the day, you know who is using [the card], what they are using it for. In terms of complexity of what you use it for, it depends on how complex you want it to be," he said. "And there are no restrictions as far as data that you already own."

From there, how the information is used to help your CU, is almost limitless, Raymond said.
"How you target your program is only limited by your own creativity," he said. "It depends on what your angle is and what you want to achieve."

Lehman encourages credit unions to study credit scoring and data mining as a way to learn about their members’ spending history.