"Curiouser and curiouser."
Commenter: "Numbers of cards issued will go up immediately---just as
soon as the new/new industry standard rewards card is out!! SECU has
not been providing what the members want. Can't you look into the
crystal ball and see that?"
✅ Probably ought to back up and clarify a few things about the SECU Rewards card program. You may be getting the wrong impression. Rewards cards are now the industry standard. Everybody has ("2.3 cards on average") a rewards card and uses them. You have one, I have one.
The question is not whether you should have a rewards card, that's your call. The question is whether SECU should issue rewards cards. If you are a "Well, everybody else is doing it!" leader, then case closed. The "lowest common denominator" has a tendency to always become the "industry standard" in business - and perhaps in our social values. Again, your call.
😎 Here are some facts which may be worth considering about SECU rewards cards:
1) SECU in the past had one of the very best, low rate/no fee cards in the U.S. - that card attracted 342,000 members with balances of $1.2 billion. A large majority carry a monthly balance.
2) When SECU was presented with the financial proposals to offer a rewards card, the card companies showed that a) the costs of rewards (miles, points, cash back) made a lowest rate/no fee card appear "unprofitable", b) the card holders who paid in full monthly were unprofitable (got a free ride) if reward benefits were @2% (miles, points, cash back), c) the only way to make a rewards card profitable was to raise rates by @3+%.
3) The card companies indicated that over 90+% of new SECU credit card account holders will choose the reward cards over the best, lowest rate/no fee card, despite the fact that over 72+% would always carry a balance - financially the wrong decision. The 72% of rewards card holders will not only pay 3% more in interest, but will also pay the costs of the rewards given to the 28% who paid in full.
4) The card companies also indicated that a majority of existing SECU low rate/no fee card holders will abandon that SECU card and move to the rewards card, further boosting SECU "profits". The primary "target" market of the SECU rewards card will be SECU members with the low rate. no fee card. Most "carry-a-balance" members have a set credit limit and won't be able to qualify for both cards
5) There is no grace period for cardholders who carry a balance over. Unlike pay-in-full card holders, members who "revolve" pay that extra 3+% immediately - from day one.
6) When a prior SECU Board considered all this, it voted against the rewards program as unfair to the majority of SECU (the 72%) members. SECU was not be providing sound financial advice to the membership as a fiduciary.
7) Every member of that SECU Board had and was using a rewards credit card! All indicated they would not switch from their established rewards card, if SECU offered such a card.
8) Members will not readily give up existing cards - with established points, miles, etc - for the new SECU rewards card. As proposed, the SECU rewards card is a mediocre industry standard. Members already have better rewards cards, or can easliy find one [search here]. Wll you change from your current rewards card?
9) The card "profitability analyses" haven't changed over the years. The only way to make a rewards card work is to overcharge the carry-a-balance members and subsidize the pay monthly folks' free ride.
10) Again "looking into that crystal ball", you and I already have a rewards card... be honest, are you going to switch to SECU rewards?
😎 Nah, why would you? You and I already have "industry standard" ... or better! And best of all, we're not asking any other SECU member to subsidize us!
"Alice-in-Wonderland says its her baby, but it sure looks a lot like a pig..."
