Credit Unions Launch Credit Card Product
The credit card market is set to expand again following an announcement by Credit Union Services Corp (CUSCAL), the industry group which governs the 201 member Credit Union Industry. CUSCAL will launch the first mass-market co-branded credit card for it’s 3.5 million members. The product has been co-developed with MasterCard International and a national roll-out will begin next month.
Up until now, credit unions have only been able to provide customers with Visa debit cards. While this product offered all the features of a standard bank credit card by definition they were not true credit cards. In recent times credit unions have been unable to partake in the strong growth in personal credit (12% over the last 4 year) and credit card growth (an average 17% for the same period).
CUSCAL’s Chief Executive Dr Vern Harvey noted this was directly attributable to the emergence of loyalty – based credit cards, a demand which debit cards could meet.
A separate CUSCAL subsidiary, Fusion Cards Ltd., has been created to manage risk assessment, marketing and alliance opportunities for credit unions. Fusion hopes to attract 800,000 cardholders over the next 3 to 5 years but will outsource the bulk of its credit card processes.
Product features summary:
Interest rate: 14.95%
Interest Free days: 55
Other: Spread Repayment Option
Allows purchase of big-ticket items at 12.95%, which can be paid off over 12, 24 or 36 month period