Visa ® Credit Card Program Management Product upgrades Limit increases

VisaVisa®® Credit Card Credit Card Program ManagementProgram Management

Product upgradesProduct upgradesLimit increasesLimit increases

BackgroundBackground

American First Credit UnionAmerican First Credit Union

$614M in assets$614M in assets

76,000 Members76,000 Members

Community charteredCommunity chartered

Visa PortfolioVisa Portfolio

Maintained the traditional card structure: Maintained the traditional card structure: Classic, Gold and PlatinumClassic, Gold and Platinum

No rewards programNo rewards program

17,584 open accounts*17,584 open accounts*

$37.4M in outstanding balances*$37.4M in outstanding balances*

Average balance $2,128*Average balance $2,128*

*As of January 2004*As of January 2004

Digging deeper…Digging deeper…

ClassicClassic GoldGold PlatinumPlatinum

# of accounts*# of accounts* 8,7438,743 5,1315,131 3,7103,710

Total Total outstanding outstanding balances*balances*

$15.6M$15.6M $12.7M$12.7M $9M$9M

Average Average balance*balance* $1,787$1,787 $2,484$2,484 $2,437$2,437

Average Profit*Average Profit* -$25.68-$25.68 $5.75$5.75 $29.42$29.42

*As of January 2004*As of January 2004

Product UpgradesProduct Upgrades

The offer:The offer:

Started March 2004Started March 2004

Upgrade from Classic Upgrade from Classic to Goldto Gold

Number of accounts

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Visa Classic

Visa Gold

ResultsResultsAutomatic upgradeAutomatic upgradeprogram startedprogram started

03/0403/04

ResultsResults

Classic profitability Classic profitability increasedincreased– Jan. 2004: -$25.68Jan. 2004: -$25.68– Dec. 2004: $28.08Dec. 2004: $28.08

Gold profitability Gold profitability increasedincreased– Jan. 2004: $5.75Jan. 2004: $5.75– Dec. 2004: $44.01Dec. 2004: $44.01

Limit Increase and Limit Increase and Balance Transfer PromotionBalance Transfer Promotion

BackgroundBackground

Need to focus on usageNeed to focus on usage

Wanted to increase our average balanceWanted to increase our average balance

Credit limit is a barrierCredit limit is a barrier

PromotionPromotion

Mailed Sept. 2004Mailed Sept. 2004

1% cash rebate on all 1% cash rebate on all balance transfersbalance transfers

Eligible Members Eligible Members were offered a credit were offered a credit limit increaselimit increase

Balance Transfer FormBalance Transfer Form

OnlineOnline

In branchIn branch

Over the phoneOver the phone

Direct mailDirect mail

ResultsResults

Mailed about 14,000 piecesMailed about 14,000 pieces

409 Members did a balance transfer409 Members did a balance transfer

Almost $1.3M in new balancesAlmost $1.3M in new balances

$67,511 in additional interest income$67,511 in additional interest income

569% return on marketing investment569% return on marketing investment

What did we learn?What did we learn?

Perception of card’s prestige matters to our Perception of card’s prestige matters to our MembersMembers

We must continue to offer annual credit limit We must continue to offer annual credit limit increases in order to stay competitiveincreases in order to stay competitive

Balance transfer promotions workBalance transfer promotions work

Continue to focus on usageContinue to focus on usage

Questions?Questions?

Ryan ZilkerRyan ZilkerAVP, MarketingAVP, Marketing

American First Credit UnionAmerican First Credit Union rzilker@amerfirst.orgrzilker@amerfirst.org

562-237-5050562-237-5050

www.amerfirst.orgwww.amerfirst.org