By: Kenna Smith, VP, B2C Marketing, PSCU

Despite another pandemic-impacted holiday shopping season that was accompanied by supply chain challenges, 2021 saw another year of high-volume holiday spending. As we have now reached the time of year when consumers look at the aftermath of their spending over the holidays, higher spending by consumers during this time of year means higher credit card balances – and trying to figure out how to pay off bills.

How can your financial institution help your current and prospective cardholders be financially healthy after their holiday season spending sprees? Campaigns that offer convenience checks and balance transfers are some proven tactics to help cardholders get their finances under control.

What Is the Benefit of a Convenience Check?
Convenience checks offer cardholders access to their line of credit in situations where credit cards are not accepted. A convenience check is a way for people to pay rent or purchase a larger item from an individual or small business that does not accept credit cards. Convenience checks also offer the convenience of quick cash. Cardholders can write themselves a convenience check and cash it to deposit money into their account, just like they would do with a personal check. Out of 82 convenience check campaigns supported by PSCU’s Advisors Plus during a recent ten-month period, which mailed on average to nearly 4000 consumers per campaign, the average favorable response rate was 3.34%, with each responder writing at least one convenience check. Usage of convenience checks is still very popular across all age demographics.

Why Include a Balance Transfer?
Providing the option to transfer credit card balances is an ideal solution to offer with convenience checks. Balance transfers are appealing to new cardholders and can also entice existing cardholders who have cards elsewhere to transition their balances to your financial institution. Cardholders look for balance transfer opportunities so they are not paying a high interest rate on the merchandise or services they purchased over the holiday season.

As reported in the December 2021 edition of the PSCU Payments Index, in November 2021, the average balance transfer was $3,179, a 2.4% increase from the low point of August 2021 by $75. We expect the rate of balance transfers to only increase after the 2021 holiday spending season.

The key to an appealing balance transfer is to start cardholders at a lower interest rate during the introductory period. PSCU research has shown that the most requested balance transfer APR offers are 0%, 1.99% and 2.99%, with average total purchases of approximately $4,402 that are transferred. After a 15-month mail campaign, historical data from our research shows that while the third quarter of the year typically has the highest average response rate of 5.28%, the timeframe most requested by consumers is the first quarter at 3.99%, with higher average total purchases at $4,707 per responder versus $4,422 during the third quarter. As our data shows that the season peak for balance transfer usage is typically in the first quarter of the year, with March being the annual peak in both usage and average amounts, now is an ideal time to launch a campaign promoting this solution for financial wellness.

Be Consistent
Marketing campaigns highlighting convenience checks and balance transfer offers are typically seen during January, February, August and September. However, since these solutions are so beneficial to cardholders, you cannot go wrong executing campaigns at any time of the year. We advise your financial institution to be consistent with the timing of your convenience checks and balance transfer campaigns, because your cardholders will come to expect them at the same time each year. This will help keep your cardholders engaged with your financial institution in order to improve their financial health instead of being lured in by a competitor.

Kenna Smith is Vice President of B-C Marketing at PSCU. In this role, she oversees B2C marketing, automation, and operations for PSCU. Smith has over 25 years of marketing, product, and operations experience in the financial services industry.