Affinity for Education
Rubenstein, Jim, Independent Banker
Missouri bank gains recognition and goodwill with scholarship-funding credit card
When it comes to supporting local education, the Bank of Belton, Mo., puts its credit cards on the line. More to the point, it puts a local affinity "Pirate Card" on the line.
In October 1996, the $55 million-- asset community bank created an affinity credit card program that funds scholarships to college-bound students. Today, the bank's MasterCard affinity program is not only a good public service, it's also good business.
Through "high energy marketing" and creative staff teamwork, the affinity program is reaping big dividends in new accounts and publicity for Bank of Belton. The program has also triggered a surge in credit card outstandings at the bank and fostered good will with local students, parents and businesses within the community.
"It's really amazing how this whole [Pirate credit card] program fell into place," says Bryan Mallory, a Bank of Belton vice president. "This program has given our bank a sense of energy-a sense of fun," adds James Blair, the bank's president.
SCHOLARSHIPS FOR STUDENTS
A participant in the IBAA Bancard Inc. program, Bank of Belton's total credit card offerings include Visa Classic and Gold, a MasterCard, an AdvantageGold home equity Visa card and the affinity Pirate Card MasterCard.
Named for and marketed around Belton High School's locally celebrated Pirate mascot, the Pirate Card returns a portion of the interchange fee revenue from participating cardholders to a scholarship fund for graduating high school seniors. In just two years, the Pirate Card program has funded $2,000 in student scholarship awards.
In banking terms, however, the Pirate MasterCard revolves $215,000 in total outstandings on 282 accounts. The affinity card offers an APR of prime plus 3.9 percent and charges no annual fee. Mallory estimates the program's initial marketing expenses ran about $2,500.
As part of the card program, Bank of Belton each week reviews the marketing results as well as the program's status of past dues, delinquencies and new applications. "Our delinquency status is less than the industry average, and we follow strict standards on credit guidelines," Mallory says.
Mallory, who picked up the idea for the affinity card from an IBAA Bancard seminar, says part of the success of the Pirate Card is the colorful cartoon image of the Belton High School mascot. The purple and gold illustration of the Pirate makes the card distinctive and fun to use, he says. "You want a card that people want to use. Providing scholarships to people wanting to go to college is not very controversial. If someone wants to further their education, it's kind of hard to knock that."
The biggest break for the Bank of Belton's affinity card program, however, came in the form of an official endorsement from the community's school board, Mallory says. …