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Lower rates are on the cards

AN emerging market of credit card users has prompted Police and Nurses Credit Society to launch a new low-interest Visa card.

The credit society joins BankWest as one of the few players in the non-reward linked credit card market.

The new market of users relies on credit rather than having a credit card to earn points. It is a category that is also undergoing transition because of the number of reward points on offer to consumers getting tougher for the consumer to accumulate.

PNCS has a reward-based credit card but next week it will launch Easypay Visa.

The new offering comes after significant market research that helped the credit society select everything from product positioning to the colour of the credit card.

BankWest did similar research before it launched its low-cost BankWest Lite credit card in 2002.

The cards are pitched at a new credit card market made up of what banking marketers call “revolvers”.

Revolvers are credit card users who rely on or need credit and often rollover debt from month to month as opposed to “transactors” who pay for everything on a credit card and pay it off every month and in doing so earn redeemable reward points.

PNCS manager member solutions Anna Pearce said PNCS’ Easypay Visa was the result of a review of its card portfolio and identifying gaps.

“We researched what our customers were using and we segmented the credit card market into product-style and groups,” she said.

“It wasn’t by demographic but rather by banking behaviour.”

The result was a definition of four markets – transactors, revolvers, purchasers, and cash operators.

“Purchasers use credit cards for occasional use and cash operators use their own funds,” she said.

Ms Pearce said PNCS would initially launch its new card to existing members and then market to a wider area.

The revolvers sector is a relatively clutter-free marketplace in WA.

BankWest’s successful Bankwest Lite offers a 10.49 per cent interest rate, PNCS’ new Easypay Visa will offer 9.99 per cent to customers who have $500 of their pay deposited with it, otherwise the rate is 12.99 per cent. Members Equity offers a card for 9.95 per cent interest, Virgin with 12.4 per cent and ANZ Low Rate offers 10.99 per cent.

PNCS’ Easypay Visa, to be  launched on April 19, is a vibrant purple colour – a choice that was determined through market testing.

So too was BankWest’s blue, feather Lite Card.

For banking marketers, not only are the parameters of the product important but so too are the colour, name, and overall card presentation.

PNCS’ other cards will be orange and green and, according to Ms Pearce, the colours reflect the credit society’s brand.

“We wanted to show a modern progressive image,” Ms Pearce said.

“The research showed the new cards displayed the attributes of a dynamic organisation that can offer strength and security in banking.”

According to BankWest consumer marketing manager Paul Hough, the bank did consumer research early in 2002, which resulted in the launch of its Lite credit card.

“We did research that looked at trends in the credit card market. It was after Ansett’s collapse and there was a trend away from rewards. A lot of people lost reward points from other institutions,” Mr Hough said.

The card has proved successful and while the rewards market is still strong – both PCNS and BankWest offer reward-based credit cards – the low-interest segment is growing.

“I can’t give you numbers but the card has performed significantly better than we thought,” Mr Hough said.

BankWest chose the name Lite because it reinforced the type of card it was but the spelling also reinforced that the card was breaking with tradition and was innovative.

“The card was seen as breaking the mould.

“We wanted a retail flavour,” Mr Hough said.

“We had quite a few designs prepared by The Brand Agency. We had one that was fluoro, some with pictures on them and some that were very space age. The blue card with the feather was a stand-out.”

The Brand Agency was responsible for the advertising that launched the Lite card, which resulted in a number of advertising award wins for the agency.

Trilogy Advertising, on a much humbler budget, is in charge of PCNS’ Easypay Visa launch.

The agency has produced a series of posters, leaflets, and radio commercials.

Ms Pearce said the credit society would be informing its existing member base before marketing to a wider audience.

 

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