|Credit Union :||GECU|
|Address :||7227 Viscount Blvd | El Paso, TX 79925|
|Start Date :||2003|
|Open / Closed End :||Open|
Loan Underwriting Qualifications :
- Sponsor or Primary Borrower must be creditworthy to qualify for a Family Account MasterCard or have a suitable co-signer
- Sponsor can assign spending limits for dependents, who do not have to qualify
- Up to 10 separate dependents can be cardholders
- Minimum age for dependents is 13
Rates, Fees, and Terms :
- Interest rate is risk-based priced
- No annual fee, no balance transfer fee, no cash advance fee
- Minimum monthly repayment – 2% of balance for each dependent
- Spending limits as low as $100
- Each dependent spending limit is subtracted from the overall credit line assigned the Primary Borrower
- Payments can be made by the Primary Borrower or each dependent
Target Market :
Young adults and college students whose parents want to monitor credit card usage and limits.
Program Results/Statistics :
Approximately 2,000 Family Account MasterCard credit cards have been issued to date.
Additional Information :
Marketing Strategy :
Advertising for the Family MasterCard program was launched using radio and television and kiosks/booths at area shopping malls. The credit union also gave presentations to high school students at area schools on the importance of having and maintaining good credit. Now GECU identifies members with college-aged children and markets the program directly to them.
Member Benefits :
- Parents can give their children a credit card but have the ability to monitor and limit their spending capabilities
- Children or family members with credit blemishes can be sponsored by a creditworthy family member with access to a credit card and rebuild their credit scores. The sponsor sets spending limits and monitors activity and repayments
Additional Information :
GECU has offered the Family Account MasterCard Credit Card since 2003. It is particularly appealing to parents with college students, according to Hazel Ledesma, E-services manager. “It’s a way for students to manage college expenditures, but they’ll know their parents will be overseeing those purchases.” The card has a 25-day grace period. If the balance is paid-in-full, there are no interest charges. The card offers the flexibility of letting dependents or the primary borrower make the payments. Statements are sent to the dependents with a courtesy statement that includes transactions and payments for each assignee sent to the primary borrower.
Ledesma notes that one of the challenges of the program is explaining how it works. Once borrowers, and parents in particular, understand the card’s flexibility, they’re sold. The Family Credit Card has been used by grandparents sponsoring grandchildren, siblings sponsoring younger siblings, and even children sponsoring their parents. Spouses have used it as a way to give each other a loan or an allowance.
Vendors/Systems/Technology Used :
Any credit union with an existing MasterCard program will find offering a Family Account Credit Card a seamless process.