|Credit Union :||CoVantage Credit Union|
|Address :||723 Sixth Avenue | Antigo, WI 54409|
|Start Date :||2008|
Membership Requirements :
- Share Requirement and any other membership requirements – $10.00.
Prepaid Card User Qualifications :
- The product was originally designed for members not eligible for checking accounts due to past overdraft problems. However, many members who qualify for a checking account use the Load-N-Go card because they don’t want to overdraw their accounts or they don’t want to carry cash.
- Other Restrictions – cardholders cannot have a charged off credit union loan, a child support lien nor any indication of fraudulent behavior regardless of credit score. Other judgments or liens do not preclude a member from getting the card.
Rates, Fees, and Terms :
- Fees Charged – $2 per month. There are no set up or reload fees.
- $10 card replacement fee.
- Small, stand-in limits are used if the system is down.
- Only source of income checks (payroll, social security, SSI, tax refunds, etc.) or cash are accepted for deposit to the Load-N-Go account.
- No automatic or ACH (automated clearing house) withdrawals are allowed.
Vendors/Systems Used :
- Technology Service Provider –We use our own internal data processor and purchased a separate BIN from our card processor.
- We use a checking account, but just don’t issue checks – works like a prepaid debit or credit card which can’t be overdrawn.
- The credit union must be operating on-line and in real time with ATM cards and turn off pay-at-the-pump.
Target Market :
- Anyone who does not qualify for a regular checking account. It allows us to provide service to those we would have turned down in the past.
- Ideal for students.
- Those making purchases over the Internet and feel safer using this account than a regular debit or credit card.
- Those who don’t want the burden of managing a checking account and want to avoid the fees associated with overdrafts.
- Those who may not qualify for a credit card but don’t want to carry excessive cash.
- Those who are sending money back to countries of origin; the receiver can use the card at an ATM to access the funds.
Marketing Strategy :
- Our website (www.covantagecu.org) carries information about the product
- Internal staff cross sell this product to members who do not qualify for a checking account
- Presentations to our employer groups; some SEGs have sent notices to their employees
- Newsletters and press releases
Program Results/Statistics :
- Over 1,644 cards in use as of June 2013
- Most have FICA scores below 600
- Average balance is just over $159
- The only loss we have experienced was when we didn’t follow our own procedures
Member Benefits :
- Member saves about $12.30 per month compared to using a Wal-Mart card; that’s over $147 per year.
- Relieves the member from having to carry cash
- Access to cash from over 34,500 Alliance One or Co-op Network ATMs nationwide without a charge
- A cheaper and easier method to handle international remittances
Additional Information :
- We developed this program when we learned our members were purchasing prepaid gift cards to make purchases over the Internet or in lieu of carrying cash if they did not qualify for a checking account.
- We thought the gift cards were too expensive and cumbersome for these uses, but we wanted to eliminate the factors that caused people to get themselves into overdraft trouble.
- This card program eliminated such problems because it is used only in real time and prevents overdrafts.
- We are very happy with the product and do not intend to change it. Our members love it. This program is basically a debit program. Internally the members using this debit card has what seems to be a regular checking account but with some heavy restrictions. The account helps them manage their finances by not giving them checks and only operating in REAL time. This makes it a very easy program to implement. Most credit unions could do it as long as their ATM program is on-line and in real time.
- The advantage to the member using this product is the savings they receive over other competing products. We are willing to offer a regular checking account over time but our guess is many of our members won’t want one. This works well for them.