Take your card portfolio to the next level with affluent cards

As community banks review their card offerings and examine ways to attract more cardholders, one segment meriting a closer look are affluent or higher net worth customers.

These customers yield twice the spend compared to non-affluent cardholders and are often attracted to enriched rewards and concierge services traditionally associated with Gold or Platinum card offerings, according to a recent Visa analysis. But now that Visa and Mastercard have dropped their Gold and Platinum products, issuers are left wondering how to attract affluent customers.

One solution to meeting the needs of this segment are affluent card products like Visa Signature or World Mastercard, which offer additional enhanced benefits compared with standard credit card offers and can include travel and entertainment perks, additional insurance coverage, and invitations to special events.

These products also hold special appeal for issuers above and beyond their value in supporting this important customer segment because of the higher interchange revenue associated with these transactions. (Visit Visa Online and/or Mastercard Optimization sites for more information on interchange.)

Affluent Card Requirements

Community banks interested in adding affluent cards to their portfolio must meet certain requirements. Here are a few of the most notable:

  • A bank must obtain their own BIN (fees apply from card brands and processors)

  • $5,000 minimum line of credit required

  • Minimum yearly spend may apply

  • Optional no preset spending limit

  • Enhanced loyalty program (FIS’s ScoreCard program qualifies. Check your loyalty provider for requirements.)

  • Enhanced reporting required

Metrics to Consider

An affluent card offering may not be a good fit for every card portfolio. If you are wondering if affluent cards are right for your bank, here are some metrics to consider:

  • Target cardholders with more than $100,000 in annual income

  • Review cardholder’s annual spend (a special report may be required to assess)

  • Review transaction types (such as frequent dining, travel, and entertainment), which are typical for higher credit card spenders.

  • Look at current high net-worth customers not carrying one of your cards. They most likely will qualify for an affluent card.

If you have a substantial number of high spenders as customers, an affluent card could be an appropriate offering for your bank. Once you decide to add one of these card products, it typically will take about 120 days to implement. More customizable benefits could take longer.

To learn more about Visa Signature, visit www.visaonline.com for a complete implementation guide that will explain the benefits and rules for issuing in detail. For World Mastercard, go to the Mastercard Optimization site at www.optimization.mastercard.com and search “World Mastercard.” The Mastercard US Consumer Credit Programs guide details benefits for World Mastercard.

It is also recommended that you discuss adding these products with your processor to understand the implementation timeframes and costs. ICBA Bancard can also be a resource as you consider portfolio changes or additions to better support current and future customers and deepen your relationships in the process.

Scott Broughton is senior vice president of client engagement and marketing at ICBA Bancard.