BIRMINGHAM, Ala.—To help members obtain credit and rebuild FICOs post-recession, Alabama Telco CU has introduced a secured Visa card.
Members deposit from $250 to $5,000 into a savings account to secure a credit line that matches the deposit.
On-time payments for the Visa Platinum Secured Card establish the member as a responsible borrower, explained Stanton Davis, VP of marketing.
“We hear all the time from our young members how hard it is to initially obtain credit,” Davis said. “We also hear from our more experienced members how hard it is to make up for past financial mistakes. We created our Secured Credit Card for them. With easy and convenient access to funds and a low interest rate, it teaches financial discipline and establishes good credit while forming positive spending habits.”
The card’s rate is 14.9%, while the CUs unsecured credit card rates range from 8.9% to 15.9%.
Stanton said no additional fees come with the secured card and that the features and benefits of the card mirror the CU’s “no-frills rate” card.
Alabama Telco rolled out the card mid-August with in-branch video and a press release. Website advertising began in September, and the CU’s latest newsletter featured a story on the offer.
“While we are truly in the introductory phase of this product, we have been pleased with the number of cards we have been able to place in our members' hands,” explained Stanton. “To date we have opened approximately 20 secured cards.”
The $608-million Alabama Telco expects that over time these cardholders will move from a secured card to an unsecured card, and then to other lending products.
“Our goal is to set members on the path to financial freedom, and we feel the secured card is a positive first step toward that,” said Stanton.
In listening to members, the CU saw a real need for the offer, shared Stanton.
“So many members have either fallen on poor credit due to any number of circumstances while others are just getting started and know how important it is to establish positive credit habits.”
--Ray Birch