|Credit Union :||Linn Area|
|Address :||3015 Blairs Ferry Rd Ne | Cedar Rapids, IA 52402|
|Start Date :||March 2005|
|Open / Closed End :||Open|
Loan Underwriting Qualifications :
- Members between the ages of 16 to 22 years
- Parental approval if below the age of 18
- Employed with sufficient income to substantiate debt
- If unemployed, must have co-signer
Rates, Fees, and Terms :
- 9.9% APR, no annual fees
- 25 day grace period
- Credit limits between $500 to $2,000
- By the time member reaches 23 years of age, he/she can qualify for a Visa Platinum card with a higher credit limit
Target Market :
Young adults between the ages of 16 and 22.
Program Results/Statistics :
- # of Plugged In accounts: 2,320
- # of Plugged In Visa accounts: 348
- Average balance in Visa accounts $328
Additional Information :
Vendors/Systems/Technology Used :
No special technology needed.
Marrketing Strategy :
All members between the ages of 16 and 22 are part of the Plugged In program. A special website for Plugged In members offers a free checking account, debit card, Visa credit card, and loans for autos. Quizlets are also offered to help young adults become acquainted with managing any of these products and if taken, a free gift such as a compressed t-shirt, is offered.
Member Benefits :
Young adults are offered a small credit card limit that is based on their ability to repay and lack of derogatory credit. Education is an important part of the Plugged In program through the quick Quizlets. Credit card users learn the importance of managing credit and building a positive credit record.
Additional Information :
Linn Area Credit Union has been offering its Plugged In credit card program since 2005. Parental consent is required for those teens under the age of 18, but the credit union doesn’t require a co-signer unless the teen doesn’t have the means to substantiate the debt. “We call the parents of 16 and 17 year olds to let them know the credit terms and to make sure they approve of their teen having a credit card,” says Alice Hagerman, VP of marketing. “We also make them aware of the Quizlets available on-line.” In 2009 the credit union charged off 10 Plugged In credit card accounts, “but these represent small balances,” says Hagerman.
The credit card program fits in well with the credit union’s ethos of thrift and education. Hagerman explains, “So many kids get into trouble with credit cards. We are trying to help them develop good credit habits and a good credit rating.”