How to Build Credit Card Wizards That Win Share of Wallet

Banks and credit unions provide a digital shopping experience that can lead customers to pick an ill-suited credit card and put an FI at risk of costly “silent churn.” The central problem is that the typical do-it-yourself shopping process emphasizes commoditized “features” such as APRs, cardholder fees, introductory points offers, and rewards—factors that can lead to a fickle relationship built on “bips” rather than broader relationship-building benefits such as financial fitness and oversight in digital banking. 

In contrast, NerdWallet, CardWiz, Smart Asset, and other card advisory fintechs tighten the fit by designing help-me-do-it wizards that take on much of the shopper’s burden of selecting the optimal credit card. The wizards position the fintechs in a coaching role by asking shoppers to first share their financial goals, needs, behavior, and lifestyle preferences. Although these fintechs are not direct lending threats, they are rivals for a consumer’s share of mind, especially for Gen Z consumers. And where share of mind goes, share of wallet can soon follow. Their wizards provide important lessons for FIs seeking to sell credit cards that cement the primary banking relationship.

Key questions discussed in this report: 

• What are notable flaws in credit card marketing practices at most banks and credit unions? 
• Why do these flaws lead shoppers to select ill-fitting cards? 
• How are card advisory fintechs improving the card-shopping experience? 
• What are the best practices for a digital card selection experience? 
• How can traditional FIs fend off the fintech threat?

Companies Mentioned: 

American Express, Bank of America, Capital One, CardWiz, NerdWallet, SmartAsset, U.S. Bank, WalletHub