Credit cards, AI, and community impact are converging fast. Here’s how credit unions can use AI and smart partnerships to grow cards and serve members better.
AI, Credit Cards, and Community: A New CU Playbook
Credit card spending in the U.S. has grown more than 40% over the last decade, and digital card usage is setting records every holiday season. For credit unions, that’s opportunity and risk colliding at the same time.
Here’s the thing about member-centric banking: you can’t claim to put members first while offering clunky card experiences, slow service, and generic products. Members judge you every time they tap, swipe, or check a balance on their phone. And now they’re quietly comparing that experience to big banks and fintechs that are already using AI everywhere.
This post builds on themes from The CUInsight Network’s episode with Matt Good of Elan Credit Card and connects them directly to AI for credit unions. We’ll look at how smart partnerships, AI-powered tools, and community focus can turn credit cards and merchant services into engines for member value, not just line items on your balance sheet.
Why Credit Cards Are Now a Core Member Experience
Credit cards used to be a “nice to have” product line. Today, they’re the front door to your digital relationship with members.
Most members hit your credit union through a handful of key journeys:
- Opening an account
- Getting a loan
- Using a credit or debit card
- Asking for help when something goes wrong
If you miss on cards, you’re missing on one of the most frequent and emotional touchpoints in banking.
The pressure on credit unions
Matt Good talked about Elan’s model: credit unions can offer competitive credit cards while outsourcing credit risk, compliance risk, and much of the operational overhead. That’s one way to stay in the game.
But the real shift is this: members expect their small, community-focused credit union to deliver a big-bank-level digital card experience. That means:
- Instant digital card provisioning
- Smart fraud alerts instead of constant false positives
- Personalized offers that actually match their lives
- Real-time insights into spending and budgets
Without AI, that list is hard to execute. With AI, it’s not only possible, it’s increasingly expected.
How AI Turns “Risk-Free Income” into Member-Centric Value
Partnership models like Elan’s promise risk-free income for credit unions. AI is what lets you turn that income into member-centric value instead of just margin.
Here’s how.
1. Smarter underwriting without losing your soul
Traditional underwriting rubs against credit union DNA. Many leaders want to say “yes” more often, but they’re constrained by manual models and regulatory risk.
AI-driven credit decisioning can:
- Analyze thousands of data points per member, not just a credit score
- Identify “near-prime” members who are actually far less risky than they look on paper
- Create tiers of limits and pricing that reflect true behavior, not just broad FICO bands
The result: more approvals for good members, fewer unexpected losses, and a story that still feels aligned with the people helping people mantra Matt Good highlighted.
2. Fraud detection that feels like protection, not punishment
Members don’t see your fraud tools; they feel the impact. Either:
- Their card works safely everywhere, or
- It gets declined at the grocery store on a Saturday morning.
AI-powered fraud systems learn from:
- Individual member patterns (where they usually shop, how much, what time)
- Device fingerprints and location data
- Network-level signals about new fraud schemes
Instead of blanket rules that shut everyone down, you get:
- Lower false positives
- Faster, more accurate fraud alerts
- The ability to message members in real time through your app or SMS
For a member, that’s the difference between “my credit union ruined my day” and “my credit union had my back.”
3. Card engagement that actually improves financial wellness
Most card marketing is noise: generic balance transfer offers, random cashback promos, and seasonal campaigns no one remembers.
AI changes that by personalizing:
- Rewards offers based on where a member already spends
- Nudges to pay more than the minimum when their utilization spikes
- Suggestions to move recurring subscriptions to a lower-rate card or credit line
This is where the AI for credit unions: member-centric banking story gets real. You’re not pushing spend for its own sake; you’re:
- Helping members use credit responsibly
- Turning data into coaching instead of just risk scores
- Positioning your credit union as a financial wellness partner, not just a lender
Serving Small Businesses: From Merchant Services to AI Advisors
Matt Good emphasized how small businesses are turning to financial institutions for all-in-one service. They don’t want five vendors; they want one trusted partner who “gets” their reality.
When you blend modern merchant services with AI, credit unions can credibly be that partner.
What small businesses actually want from their CU
Most small businesses don’t wake up excited to talk about merchant services. They care about:
- Getting paid reliably and quickly
- Reducing fees they don’t understand
- Avoiding fraud and chargebacks
- Having one person they can call when something breaks
A strong merchant services partner covers the plumbing. AI helps you deliver insight.
AI-powered merchant services in practice
Here’s what this can look like:
- Transaction analytics: An AI tool surfaces that a local café’s weekday morning sales dropped 18% over the last three months while weekend sales held steady. Your business banker can start a conversation about menu, hours, or pricing—armed with facts.
- Cash-flow prediction: Machine learning predicts the next 30 days of cash-in and cash-out based on seasonality and past behavior. You can proactively offer a small line of credit or advice on smoothing payables.
- Chargeback pattern detection: AI identifies that one product SKU is driving a disproportionate share of disputes. Now your staff can help the owner rethink return policies or descriptions.
Most credit unions don’t have the internal resources to build these tools from scratch. But you can:
- Choose merchant services partners with AI analytics baked in
- Integrate those insights into your CRM and business banking workflows
- Train relationship managers to use those insights in conversations, not just in dashboards
This is exactly where the Elan-style partnership mindset meets AI: outsourcing the heavy lifting while staying in control of the member relationship.
Choosing the Right Partners: What “Good” Looks Like in 2025
Matt Good talked about best practices for picking a merchant services partner. I’d extend that logic: any partner you choose in 2025 should have a clear AI roadmap that aligns with your credit union’s values.
Here’s a straightforward checklist.
1. Member impact first, not just revenue
Ask vendors:
- How does your solution improve the member experience in 90 days?
- How do you measure member satisfaction, not just adoption and spend?
- What controls do we have over AI-driven decisions and messaging?
If a partner can’t articulate how their tools support member-centric banking, that’s a red flag.
2. Transparent AI, not black boxes
Regulators are watching AI closely, and members are increasingly skeptical of automated decisions.
Look for partners that can:
- Explain, in plain language, why a model made a decision
- Provide override processes and human review options
- Support your fair lending and bias testing requirements
Member-centric AI isn’t just impressive; it’s accountable.
3. Integration with your existing tech stack
Great AI that lives in a silo isn’t helpful.
You want:
- Data that flows into your core and CRM
- Alerts that show up where your staff already works
- APIs or connectors that prevent yet another swivel-chair workflow
This is where many credit unions get stuck—not because AI is too complex, but because they underestimate the cost of poor integration.
4. Community alignment and giving
Matt Good emphasized charitable giving and community outreach. That’s not fluff. Members pay attention to whether their CU’s partners:
- Support local initiatives
- Respect community values
- Empower, rather than extract from, small businesses
When you evaluate AI-powered card or merchant services vendors, include community alignment in your scoring. You want partners that help you tell a story your members are proud of.
Bringing It All Together: An AI-Ready Credit Card Strategy
Most credit unions don’t need to rebuild their card and merchant programs from scratch. They need a clear, realistic roadmap that connects AI capabilities to member outcomes.
Here’s a practical 6-step approach you can start on next quarter:
-
Audit today’s experience
Map a member’s journey across credit cards and small-business services. Where are the delays, frustrations, or confusing moments? Gather 10–15 real stories from members and staff. -
Identify two AI use cases with immediate payoff
Common quick wins: card fraud detection, member service chatbots, and basic merchant analytics. Pick what solves the loudest pain first. -
Align with partners (or find better ones)
Talk to your existing card and merchant providers. What AI capabilities are already available that you’re not using? Where are the gaps you can’t live with? -
Pilot with a clear success metric
For example: reduce card fraud false positives by 30%, or cut small-business support tickets by 20% via better analytics. If you can’t measure it, don’t call it a pilot. -
Train your people, not just your models
The most underrated step. Staff need:- Simple explanations of what the AI does and doesn’t do
- Talk tracks for explaining AI-driven decisions to members
- Clear escalation paths when something feels off
-
Tell the member story out loud
When you use AI to protect members, approve more fairly, or support local businesses, talk about it. Credit unions often do the right thing quietly—and then big banks get the credit for being “innovative.”
Where AI for Credit Unions Goes Next
The CUInsight conversation with Matt Good underscored a truth many credit union leaders already feel: card programs and small-business services are under intense pressure, but they’re also where your cooperative values can shine.
AI doesn’t replace that people helping people foundation. Used well, it amplifies it:
- Smarter credit decisions mean more members in your community can access fair credit.
- Better fraud tools mean fewer ruined weekends and more trust.
- Deeper merchant insights mean local businesses stay open, hire, and grow.
As you think about your next strategic plan, don’t frame AI as a tech project. Frame it as member-centric banking at scale. Start with one or two focused use cases in credit cards or merchant services, choose partners who share your values, and build from there.
The credit unions that win the next few years won’t be the ones with the fanciest models. They’ll be the ones who use AI to quietly, consistently serve members better than anyone else.