A "sporting" chance?
Out here in rural North Carolina, hunting is still a widely practiced part of the social fabric. Things really start popping in the Fall when deer season takes hold.
Local folks consider deer hunting a "sport"- just like football, baseball, soccer. Always found that idea hilarious. Sorta unusual to think of deer hunting as a competitive game, when one competitor is equipped with a high-powered rifle, while the other one isn't. A sport where one player controls all the rules, while the opponent doesn't even know it is "playing"!
Quite a "sport"!, which brings us back to "rewards" cards and "the other player" in that game... the "revolver".
😎From a commenter yesterday [link]: On "transactors and revolvers ... "a very valuable term and distinction that gets right what is a good topic - who the winners and losers are in a rewards program."
You saw yesterday that a rewards card works well for "the transactors". Those members work to accumulate rewards, but avoid interest charges by paying the balance off each month look like the "winners".
That leaves the "revolvers" who must be the "losers" according to our commenter. Why so? Because the "revolvers" pay the highest rates (15% to 18%!) charged by SECU for the privilege of "hunting" for those rewards. The non-rewards SECU credit card is 3.00% less. In fact, all other SECU loan alternatives have substantially lower rates!
😎 Would you be willing to pay 3%+ more on your mortgage to "earn rewards"? How about 3%+ more on your auto loan? Then why so on your credit card?
Oh deer! Something's not right...
Oh Deer!! Perhaps the revolvers should be more responsible and pay off their balances! What a garbage post.
ReplyDeleteI think that SECU should just admit what is obvious. All of these moves will lead to an increase in revenue, which is most likely the reason for them. Trying to increase revenue is American as “apple-pie” banking, right?
ReplyDeleteSure, it may help some of the members. However, the move is intended to produce higher profits. Nothing wrong with that. However, if it looks like a duck and quacks like a duck, then it’s probably not acting like a credit union.
And if credit unions have moved so far away from their original purpose where they look just like banks, then they should be taxed just like banks…
Sorry to break it to you, but Rewards cards are very expensive, too. The concern should be whether the program will sustain itself or not. SECU is marginally profitable. Every once in a while there is a legitimate criticism of the Bisrd and ELT on this blog. Being profit focused isn’t one of them.
Delete8:52am Agree that the rewards program will neither benefit members nor SECU much, while financially harming members who switch out of their Classic SECU card.
DeleteWhy? Members who are "transactors" with rewards cards elsewhere will find no advantage in making the switch. Some "revolvers" elsewhere may take the time to switch, but most have better things to do with their time and historical stats say they won't move.
Existing SECU Classic cards will be tempted with SECU having cast the "no balance transfer fee'" incentive out there. But the CU seems to be shooting itself in the foot by making existing cardholders reapply, wasting members' time, and provoking some "interesting language" from them!
Not very astute "marketeering"!
In reference to 8:52 comment about reward cards being very expensive. That is a concern as well. Of course, not all purchases qualify for the 1.5 - 2% reward, so SECU would still use those funds for operational costs. For members to reap the most rewards, they pay no interest. How will the reward program be sustained? It seems other rates will have to be negatively impacted to cover the expense. Otherwise, is the program's success dependent on members carrying balances at the higher rate?
DeleteYour entire argument against the rewards card is just proof that you have no idea how these work. Just more gobbledygook. Are you saying that the rewards card pits member winners against member losers? Could the losers just pay their card and not carry a balance?? Yeesh.
ReplyDelete8:31am Unfortunately I do have a very good idea "how these work".
DeleteThe core objection is not member pitted against member. The disappointment is that the CU has chosen to enter "the game" playing against the members. The CU is moving from shepherd to predator?
...remember SECU was supposed to be a trusted advisor.
Ever heard: "Virtue has its own "rewards"!
Now even more gobbledygook. You think SECU is now a predator? Ridiculous. You're worried about the risk of a member paying a few more bucks in interest, when we have over 1.5 billion in bad mortgage loans
DeleteNow even more gobbledygook. You think SECU is now a predator? Ridiculous. You're worried about the risk of a member paying a few more bucks in interest, when we have over 1.5 billion in bad mortgage loans
Delete9:35am What? $1.5 Billion!!!? Thought the CU had just "modified" (TDR's - see 5/14/2025 post) thousands of mortgage loans to make them "un-delinquent".
DeleteBest advice, if that upward trend has returned? STOP MAKING BAD LOANS! (Sound in all circumstances!)
Check with "legacy" branch staff for guidance if you need help.
Edit the comment and dodge the topic. You won’t talk about the real issue with mortgage because you can’t pin it in new/new. Have a little honor.
Delete“Legacy” branch staff are who make the bad loans in the first place. The “handshake” loan is dead and gone. Good riddance. A member gets turned down at one branch and hops across town to another one and gets their loan only to be charged off in three months. But at least we lended so we could “help them out”. Great job legacy really brilliant.
DeleteThere will always be those of questionable character ... borrowers and lenders ...
DeleteBut I thought decisions were all scored based and we don’t ask, understand or empathize with things that happen to members that affect their score. And, we’ve been told on this blog local decisions and accountability went away. If that’s all true, then how does a member get declined at one branch and approved at another?
DeleteWell not only did 2:21 just summarize the attitude of most new/new employees that arrived with Haze, they simultaneously insulted every branch employee who has worked for Secu longer than 3 years. This is one longtime member that knows the difference. The branch folks are the life blood of Secu day in and day out. Thank you for what you do with empathy and care. You get it. The members get it. Don’t let 2:21s bring you down.
DeleteA revolver that carries a $1,000 balance perpetually needs to spend $1,500 a month their rewards card to break-even, assuming 12%, 15% and 2% cash back. That is not hard to do for most households. The best product utilization would be to switch most of your debit purchases to credit purchases. Members that carry a balance can still win with a rewards card. You don't seem to want to acknowledge that fact.
ReplyDeleteYes, "moving from shepherd to predator" is a concern. SECU has been a shepherd of sorts for members. Providing member services to help them financially better than industry standard, ie, salary advance loan, no annual fee/lower interest credit card, no PMI on mortgage loans, etc. SECU Foundation provides community assistance. So much to be proud of!
ReplyDeleteAs a trusted advisor, be vigilant when issuing cards and monitoring usage. The goal is to reward members not increase their debts or delinquencies.
Your credit report now knows when you buy stuff with the 'pay later' option ...
ReplyDeleteWSJ
https://www.fidelity.com/insights/personal-finance/bnpl-credit-report