Transitioning Your Credit Card Portfolio to Variable Rate APRs: A Look at How..and Why Now?

The CARD Act left credit unions with very little recourse available to re-price in the event of rising market interest rates, and although the Fed’s monetary policy has so far kept rates at record lows, recent political events and management changes at the Federal Reserve could signal more volatility on the horizon.

With the possibility of funding cost increases and the reality of CARD Act portfolio re-pricing limitations, Advisors Plus recommends that credit unions immediately begin to market all new credit cards with variable APRs and consider migrating existing portfolios toward variable APR pricing.