|
For Immediate Release
Contact:
Jan Dailey, SVP, Marketing Manager
972-391-6191, jan.dailey@tnbcard.com
Kristine Tanzillo, Dux Public Relations
972-889-9577, kristine@duxpr.com
 Printer Friendly
TNB CARD SERVICES OVERHAULS
FREEDOM FIRST FCU CREDIT CARD PROGRAM
ROANOKE, Virginia - January 8, 2007 -
Disappointed in the stagnant growth and marginal
revenue of its credit card program, Freedom First
Federal Credit Union decided to give the program one
more chance. It changed processors, to TNB Card
Services, and launched an aggressive overhaul of the
card program that has paid off in 9.5% growth in
outstanding balances.
TNB and Freedom First FCU jointly announced today
the successful revamping of the credit union's Visa
credit card program. Freedom First's card portfolio
was thoroughly analyzed and assessed through TNB's
portfolio consulting group. The portfolio was rated
on risk, credit line management, and portfolio
segmentation. Portfolio consultants then reviewed
the data and developed a comprehensive and strategic
plan to grow the portfolio.
Freedom First, 50 years old, was originally known
as Roanoke General Electric Federal Credit Union.
Now community chartered, it serves the southwestern
Virginia counties of Roanoke, Botetourt, and
Montgomery. With some 36,000 members, Freedom First
FCU has more than $190 million in assets.
Paul Phillips, CEO of Freedom First FCU, said the
credit union and TNB applied credit scoring to the
entire portfolio as part of the conversion. That
enabled Freedom First FCU to extend Platinum cards
and higher credit limits to two-thirds of the more
than 9,000 converted accounts.
"Typically, a converted portfolio declines
at first because of the higher APRs that higher-risk
cardholders receive when the portfolio is
analyzed," explained Dusty Bowers, senior vice
president and national sales manager of TNB Card
Services. "But because so many cardholders in
the Freedom First FCU program received a lower rate,
it reversed that trend."
Phillips agreed, explaining, "In most cases,
members' interest rates went down and their limits
went up. We also eliminated the annual fee and they
now get cash back rewards. The effective net yield
of the portfolio increased because of the new
risk-based pricing strategy and lower service cost.
"Late fees were also modified along with
over-limit and cash advance fees. The new fee
structure more than made up for the revenue we lost
when we eliminated annual fees and for the increased
cost of adding cash-back rewards. Because the end
result was a better card program, members not only
kept the card, but actually started using it
more."
Phillips noted how TNB's portfolio consultants
identified where Freedom First was leaving money on
the table and what the credit union needed to do to
grow the portfolio. TNB offered capabilities, such
as variable rates for different card products, that
Freedom First's former processor couldn't do.
Freedom First now offers its members a high-value
card that competes with what the national issuers
offer. Increased utilization is powering the
portfolio balance, and the pricing strategy, with
its revamped APRs and fees, is generating much
greater revenue. Increasing the credit lines also
worked well, with the average credit line now at
nearly $3,500, a 15 percent increase over the
pre-conversion portfolio average.
"We felt the credit card was a key component
of our product offering, and if the program was
redesigned and priced correctly, it could be a
winner," Phillips said. "I am more than
pleased with the results and am confident the
portfolio will continue to grow."
Freedom First FCU chose to convert its card
program to TNB after reviewing a number of
processors. It chose TNB based on the price of its
program, flexibility in marketing and account
management, TNB's experience as a processor and card
portfolio owner, and its portfolio consulting
service, which proved to be a major benefit. In
addition to processing, Freedom First FCU also uses
TNB for its card activation program, card reissuing,
and other administrative functions.
-t-t-
About TNB Card Services
TNB Card Services, owned and directed by credit
unions since 1976, provides electronic payments
processing, as well as an agent issuing solution for
credit unions nationwide. Serving more than 450
financial institutions and managing more than 1.6
million cards, Dallas-based TNB enables credit
unions to enhance member loyalty through credit
union-branded card products. For more information
about TNB, go to www.tnbcard.com or call Dusty
Bowers at 1-800-422-0733 ext. 6555.
|
