January 2023

The Powerful Secret Weapon for Growing Credit Card Accounts

By Vito LabellarteMark's Minutes

Now is a great time to pursue new credit card accounts. Especially if you currently have a strong competitive position in rate or rewards.

As we know, in an upward rate environment like we have now, credit card rates move up very quickly. APRs of 20% plus are common in these circumstances. For the credit card user, even a small increase can translate to much larger liabilities in the short and the long term.

Consumers are more aware of these higher rates as rate change notifications are sent out by the card issuers and other financial institutions.

The Balance Transfer — A Fast Way to Grow Balances and Accounts

That’s why the Balance Transfer program is an easy and convenient way for a consumer to transfer their credit card balances to you.

Most promotions we are beginning to see are offering a special reduced rate (like 3.99% or similar) on the balance that is being transferred over. Of course, the lower the rate the better as it might be the differentiator when deciding between two providers.

Targeting the Right Consumer

According to Money Geek, current average credit card debt levels are listed below. While average credit card debt is highest in the 75 + age group, they do not carry debt, meaning they likely pay off their credit cards each month. Those ages 54 and below offer a high potential return.

Age Group	Median Credit Card Debt	Average Credit Card Debt	Percentage Who Carry Debt
Younger than 35	$1,900	$3,700	48%
35-44	$2,600	$6,000	51%
45-54	$3,200	$7,700	52%
55-64	$3,000	$6,900	47%
65-74	$2,900	$7,000	41%
75 or older	$2,700	$8,100	28%

How to Promote

There are many ways to promote a balance transfer. Much depends on your budget and target market. Make sure your creative message and imagery speaks to the target market. Age-appropriate imagery is important. Key benefits of the program will vary depending on the age target:

• Younger – Reduce debt, save money, increase overall borrowing power
• Older – Pay down debt, put more money away for retirement, meet growing family needs
Preapproved Credit Card Offers sent to a targeted list via direct mail are one of the best options. Also using email offers to apply for a new credit card along with a link to a web splash page showing the Balance Transfer program details and an application. If you have a strong card program, always show a comparison of your card against the other competitive offerings.

Round out your direct mail campaign with in-branch merchandise and signage. Many companies also include incentive programs for front line staff efforts to generate the best results in selling credit cards.

You need to move quickly. If rates change again the opportunity may as well.

Thanks for joining me today!

January 26, 2023

Where oh where have the loan opportunities gone? Home Equity!

By Vito LabellarteMark's Minutes

The low hanging fruit in lending has seemingly dried up. While the Fed continues to raise rates, we have seen all loan rates increase along with them.

Just six months ago you could find auto loans below 3%, now they are closer to 5% and above. Let’s not forget about mortgages. Those have gone from bad to worse. Today’s average mortgage rate is 6.52%.

But there are options! Within an upwardly moving rate environment, a home equity loan can be a great solution to a consumer.

Today’s homeowner is now sitting on the largest amount of equity in history. CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase to an average of over $300,000!

The $300,000 may be subject to a decline as we watch home prices adjust to the new, slower level of sales resulting from the mortgage rate increases.

What’s a marketer to do?

Now is the time to leverage the home equity loan (or line of credit) as a tool to help your consumers with alternative loan choices.

Promote the following benefits in your marketing communication:

1) Pay down higher balance credit cards. The average credit card rate is now almost 20% while the average home equity loan is 7.75% and the average HELOC is 7.30%. If someone is carrying a 20% credit card rate along with a large bill coming out of the holidays, the line of credit could reduce their monthly outflows significantly.

2) As a source of funds for an RV or Boat loan. RVs and other items often carry a much higher interest rate than a traditional auto. Consider a home equity option as an alternative, especially as we move into the spring and summer months.

How to promote

You can promote home equity in two distinct manners:
• Targeted Offers – Use a predictive list to help you identify the highest equity households within your market area. Send a targeted letter along with projected savings seen when converting higher rate loans over to an equity loan.
• Broadscale Marketing – Don’t be afraid to push out messaging to your account holders through email, web banners and other digital messaging.
• In-branch Merchandising – Signage and other POS will help you drive awareness to consumers.
One final note on Home Equity Loans. Please avoid using the term HELOC in your headlines and marketing messages. Most people don’t know what a HELOC means. They might if you added “Home Equity Line of Credit” next to it, but not by itself.

There are loans out there, you’ll just have to look a little harder for them.

Thanks for joining me today!

January 19, 2023

Marketing During Financial Instability

By Ken DunnMark's Minutes

It’s no secret that the financial equilibrium is in flux right now. The Fed continues to ratchet up rates and the stock market is in disarray. Up one day and down the next. Nationally, interest rates on savings vehicles are up as high as 4% for 12-month CDs distributed by the aggressive internet banks. On the street, 2% is the absolute minimum to offer and maintain credibility.

Our clients are coming to us increasingly asking for help with deposit product promotional strategies. With the upward movement of rates, the public interest in the entire line of deposit products is going to grow. Time to dust off your new and improved checking accounts (maybe with newer and higher reward debit features?), your short to medium term CDs, and your retirement focused accounts (IRAs, Roth Savings, etc.)

Many experts are forecasting a recession and a corresponding rise in unemployment. This will likely result in downward pressure on the stock market, some dampening of lending and a move to safety.

With so much in flux, your marketing messaging should be about delivering security, clarity, and confidence to your consumers. Historically, when the market falls and recession is on the horizon, preservation of capital will be the primary goal for many.

What can you do now to help your consumers prepare?

Promote High Yield Checking and Savings in January and February. Historically, checking products have a higher consideration during the early months. With higher rates you can build a more competitive product offering. If you move quickly, you’ll be able to gain market share quickly. Imagine the results you’d see if you offered a 2 – 3% interest bearing checking or money market account? Promoting these items across the normal channels should build traction:
• In branch merchandising
• Outside banners, posters and window signs
• Digital and traditional advertising; Web features

Marketing during downturns is never easy. You’ll face a lot of pressure to decrease your marketing budgets and reduce your outreach.

It’s been proven that those companies that advertise during the recession are the ones that benefit the most once the recession ends.

Keep your wits about you. Now is your chance to shine!

January 10, 2023