Important Characteristics of Third-Party Card Revolvers

Author Joseph
Read time 5 minutes read time

New Nickels Console Update Identifies Heavy Revolvers for Improved Targeting

With economic uncertainty all around us and credit card debt setting all-time records each month, consumers are looking to their primary financial institutions to help them manage their financial health and offer products and services that can help them on this journey.  Yet many financial institutions struggle to get this right.  That’s not a surprise; it’s a common marketing challenge to target the right consumer at the right time with the right message.

In an earlier blog, we showed how we’ve developed a reliable and repeatable process to identify which consumers are revolving on third-party credit card debt (i.e. using cards with Capital One, Citi, etc. and not paying their statement balances in full each month).  Targeting third-party card revolvers based on payment behaviors that are identifiable through checking account data can help banks and credit unions identify which consumers are the best candidates to refinance their revolving credit card debt. This is a win/win: it helps consumers save money by moving onto lower interest loan products, and helps financial institutions by adding new loans under management.

In our latest tests, we’ve dug even deeper into the revolving characteristics that make consumers the best candidates for refinancing third-party credit card debt.

Why Revolving Frequency & Recency Matters

We already knew that third-party card revolvers (i.e. those that are not paying their third-party card statement balances in full) refinance at a higher rate than other consumer groups. Beyond just identifying revolvers, our team has conducted additional analysis to better understand which segments of revolvers respond to what messaging, and why.

One key distinction is revolving frequency. Some consumers show signs of constantly revolving; their payment patterns indicate that they almost never pay their statement balance in full. We call these consumers “heavy revolvers.” Other consumers revolve less frequently, they use credit cards to bridge a financial gap a few months of the year, but pay their full statement balance in other months. We call these consumers “light revolvers.”

In a recent test, we looked more closely at revolving frequency. Do heavy revolvers respond to messaging differently than light revolvers?

Heavy Revolvers Refinance at a Higher Rate

We sent the same email campaign offering loan applications to both heavy and light revolvers and monitored their application and uptake rates for personal loans.

We learned that heavy revolvers refinance their third-party card debt at higher rates than light revolvers.  

Moreover, the recency of revolving (i.e. when the consumer last showed signs of revolving behavior) also correlates to being more receptive to offers to refinance their third-party credit card debt.

The Takeaway: Focus on Heavy, Recent Revolvers

While all third-party card revolvers were more responsive to loan refinance offers vs. other consumers at a financial institution, the analysis shows that heavy, recent revolvers take the most action and, therefore, have the highest propensity to refinance their revolving third-party card debt.  This group showed substantially higher loan application rates and higher funded loan rates. 

This deeper analysis of third-party card revolvers can help financial institutions like banks and credit unions more specifically target their consumers, focusing on those who are most likely to take action and refinance their third-party credit card debt.

Looking at data this way helps financial institutions:

  1. Prioritize their heavy, recent revolvers and target messaging that directly speaks to the needs of that consumer segment. For example, organizations can focus high-touch/resource driven marketing tactics like pre-approvals or outbound calling to recent, heavy revolvers to maximize marketing efficiency and ROI. 
  2. Create better consumer service experiences for other consumers by re-prioritizing refinance marketing campaigns based on frequency and recency of revolving behavior. We recommend sending multi-email campaigns to recent, heavy revolvers and recent light revolvers, and a single email to non-recent light revolvers.

Nickels Admin Console Now Identifies Frequent, Recent Revolvers

Nickels recently rolled out an updated admin console that allows financial institutions to see their third-party card revolvers (and transactors) on a monthly basis.  And the analysis now differentiates revolvers between light and heavy revolving characteristics.  This gives them the freshest information and insights on recency plus frequency. Nickels’ clients can use this data to pull monthly reports on revolving behavior to inform their ongoing marketing campaign’s content and cadence.

The updated admin console gives credit unions and banks insights to even better target their products and messaging around refinancing third-party credit card debt to the specific consumer segments that are most apt to respond to refinance offers.  Nickels also updated and refined our turnkey marketing campaign playbooks with messaging developed specifically for each consumer segment.

In the coming months we’ll be running additional tests and analysis for groups with other distinct card payment patterns, including those that are transacting on third-party credit cards (i.e. using cards provided by the major banks and paying their statement balances off in full each month).  We see opportunities to shift transacting card spend to our banks and credit union clients.

To learn more about how Nickels can help your financial institution analyze customer credit card data and target customers via customized marketing playbooks, email