With 100 million people affected by the recent Capital One data breach, what better time for credit unions and community banks to push your secure credit cards!

It raised the question, “what kind of credit card do people want?

About 42% of households are able to pay their credit card balance in full each month according to a Federal Reserve report. These are the households that will only bring you interchange income. So let’s focus on the 58% that carry balances.

CreditCards.com recently commissioned a nationally representative survey and found 57% of U.S. adults have at least one rewards credit card:

  • 43% Cash back cards
  • 28% Gas/Retail
  • 13% Airline/Hotel
  • 12% General Travel
  • 8% Business

Consumers don’t just like the cash back cards, they use them.

  • 52% have redeemed for cash back in the last year
  • 29% have redeemed for gift cards

What keeps these programs profitable is the 22% who haven’t redeemed any rewards at all and still pay the 16.24% – 26.24% APR that Capital One’s QuickSilver card is charging today.

You read that right … 16.24% to 26.24% APR! The Chase Freedom card is even more at 17.24% to 25.99%.

So, let’s really analyze the 1.5% cash back “deal.”

  • According to Experian, the average American household carries $5,551 in total credit card balances
  • They will receive $83.27 cash back
  • They will pay $901.48 in interest at the “low” 16.24%
  • The net is $818.21 paid to the cash back card

How Do You Compete?

According to the  NCUA, the national credit union average for credit card rates is 11.80% APR (June 2019). So, the average credit union member is paying $655.02.


What’s In Your Wallet?

With Capital One’s Cash Back card … a hell of a lot LESS!

You are not competing with the community bank or credit union down the street. For credit cards, you’re competing with Chase (93 million card holders), Citibank (48 million), Capital One (45 million), Bank of America (32 million) and Wells Fargo (24 million). Really analyze their cards. Break down what they are “offering” and find how you can make a tangible story to beat it.

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