$4m in Refinanced Members’ Credit Card Debt

Author Nickels
Read time 4 minutes read time

Nickels and Michigan State University FCU Case Study on Success in 30 Days

Revolving Credit is at an All-Time High in the US

Americans are experiencing the highest levels of credit card debt in nearly a decade and paying >$110B in interest and fees on credit cards each year.  Credit unions are also feeling the pain of higher interest rates and reduced deposits as their members spend down their accounts to pay bills, leaving credit unions with dwindling assets under management.

Case Study: Michigan State University Federal Credit Union

Michigan State University Federal Credit Union (MSUFCU) is the largest university-based credit union in the world, with more than 330,000 members and $7B in assets. MSUFCU wanted to help members who were depleting their savings and carrying high revolving third-party credit card debt, but didn’t have the insights to run an email campaign targeted to members who could benefit most from offers that could convert debt into lower interest loans.

Identifying Revolvers and Targeting Personalized Outreach

Nickels helped MSUFCU identify which of their members had revolving third-party card debt by leveraging MSUFCU’s checking account data and identified that nearly 200K members  had paid over $1.75B in credit card payments over the past year. Nickels also identified: 

  • 35K members that showed strong signs of revolving through their card payment patterns
  • This equates to over $205M in revolving third-party card debt based on national average revolving balances.
  • This third-party card debt will cost members >$40M in interest and fees in 2023 alone. 
  • Identifying both the third-party credit card Transactors and Revolvers was the first step to understanding which members would benefit from which MSUFCU products.

Transactor vs Revolver: Knowing the Difference is Key

Transactor: Pays their credit card statement balance in full every month.

Revolver: Pays less than their credit card statement balance (at least periodically).

  • Credit unions know that over 50% of their members likely have revolving third-party credit card debt.
  • Yet, because >90% of this debt is held by the major banks and card providers, credit unions do not have visibility into this debt.
  • Credit reports do not show which credit union members are Transactors and which are Revolvers.

Creating a Plan to Help Members Pay Down Debt While Creating New Deposits

Nickels identified MSUFCU’s third-party card Revolvers and Transactors but that was only one part of the equation. Nickels then worked with MSUFCU to create email campaigns with targeted messaging and offers to test with MSUFCU Revolvers and Transactors. 

  • These offers were customized to help Revolvers pay down their revolving debt by converting it into lower interest loans or transferring balances onto 6-month interest-free lines of credit with MSUFCU. 
  • Communications were relevant in ensuring that members received emails and offers applicable to their credit situation. 
  • Nickels also created several variations of emails, text, and push campaigns to provide MSUFCU with simple and effective messages to drive action and produce strong results. 

Using a Nickels’ email campaign playbooks provide financial institutions with ready-to-send, targeted and behaviorally-based communications that drive refinance and engagement opportunities. These playbooks can easily be edited or adapted to the needs of the financial institution, and then placed into an existing content management system for streamlined outreach.

The Results

A single targeted email generated more than $4M+ in new personal loans and $6.5M in new card limits for MSUFCU in just 30 days. 

  • By only targeting a quarter of MSUFCU’s members based on checking account analysis, Nickels helped drive over 40% of their personal loans funded and nearly half of their new credit limits in a 30-day period. 
  • This leaves the other 75% of members free to receive other offers to help boost deposits.

Targeted Outreach Leads to Almost 2x Results

By targeting 28% of MSUFCU’s members, MSUFCU and Nickels were able to help drive 44% of their personal loans funded and nearly half (48%) of their new credit limits issued over 30 days.

Nickels helped MSUFCU successfully identify which members would benefit most from refinance options to manage their third-party credit card debt and designed targeted email campaigns that created new loans and business for MSUFCU within a 30-day window, creating a win/win for both members and the credit union’s bottom line.

To learn more about how Nickels can help your financial institution analyze customer credit card data and target customers via customized marketing playbooks, contact Pierce Sloan at pierce@nickels.us.

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