The SECU "New/New" Rewards Cards - Playing A Losing Hand?

  ...  Uh oh!!

✷ "Coming June 1, New Customized Cash Rewards Cardholders Will Earn 6% Cash Back... Bank of America ."

Wanted to revisit the SECU Rewards Card program one more time as it gets rolling. As you can see above, the Credit Union has dived headfirst into a world of hype and hoopla. The "rewards game" is played relentlessly and in earnest by the large commercial banks. The banks are experts at "The Game"; they are effective; they take no prisoners. 

✅ SECU will not win in the "rewards game" and most SECU members will lose. But before we look at that, lets set a benchmark against which to measure the future. 

SECU has offered credit cards for over 40 years. At 12/31/2024, SECU reported 341,500 credit card holders with balances of $1.2 billion. The only credit card offered in the past was a no frills, no fees, "lowest interest rate around", globally accepted Visa. SECU began offering a rewards program in March, 2025. So there's your starting point against which to measure future "success". 

Why will SECU members lose the "rewards game"? Those members who know how to play and win the "rewards game" will not switch from their existing rewards card programs. Those members have already found "better rewards deals". They will continue also using their secondary "retail-tied" credit cards which offer price discounts on products purchased (get "20 off" on a big screen TV or "free" airline upgrades!) These members will believe SECU is offering an inferior product to them and that type "reputation dent" has a tendency to spread.

😎 But the SECU members who will really lose are those who carry a credit card balance over from month to month. Of the 341,500 SECU cardholders, historically between 60/70 % do just that. The "lowest interest rate around" SECU card is hugely beneficial to those members.

But being human like the rest of us - and since SECU now says the "rewards game" is where its at!; many SECU members who regularly carry a balance will switch over to the much higher interest rate SECU rewards card program. 

😎 "It was the most often ("raise your hand"!) requested member service!" And all of us, of course, like to get a little something for nothing!

  I sold you the drug, but I didn't make you take it.

Why SECU Lending Needs To Change And Bears Watching...

   

 Careful!... or you will definitely get mauled! 

Now that you are an expert on "TDR's" [post link] and have an honest understanding of the principal reason SECU's delinquency "dropped $581 million, down 51%!" overnight, lets take one last glance at the remaining, overall delinquency situation at the Credit Union.

Any major TDR  adjustment in the hundreds of millions of dollars will make future comparison of delinquency "awkward" at best. Why?  Because many loans that were delinquent over the last six months are now "undelinquent", or much less so. The goalposts have moved a bit!

So, what do you do?  You increase your focus on the 3+ month (90+ days) delinquency totals, rather than tracking the 60+ day delinquency totals. Why?  Because while TDR adjustments make many 30, 60, 90 day delinquent loans "undelinquent"; TDRs generally do not greatly impact the 90+ days delinquent accounts. 

A commenter indirectly pointed this out yesterday by noting that according to the SECU's website financial summary [link], 3+ month delinquency had increased from 1.11% in March, 2024 to 1.39% in March, 2025. Note that the increase in 3+moth delinquency to 1.39% is after the large TDR adjustment.

✅ What do those "%s" mean in real dollars?  The 3+ month delinquency at SECU has increased from $376 million in March, 2024 to $495 million in March, 2025. That's an increase of +32%. During the same period, outstanding loans increased by only 6%.

😎 The 3+ month delinquency level of $495 million is an excellent "leading indicator" of future SECU loan losses over the next two years.

SECU is making a substantially larger number of bad loan decisions than in the past. The SECU Board should address the problem.

 

  Or should SECU members be expected to just grin and bear it?