HARRISBURG, Penn.-At a time when many of the big card issuers are scrambling to create new fees and raise rates on existing balances, Pennsylvania State Employees CU is lowering the rate on certain card balances.

Holding one of the largest CU credit card programs with $420 million in balances, PSECU lowered the rate on VISA balance transfers from 4.9% to 3.9%. The rate is good until Dec. 31, 2011, at which time it reverts the CU's standard 9.9% rate. PSECU does not charge a balance transfer fee.

"We're also lowering the rate on $39 million of balance transfers that members already took at the original 4.9% balance transfer rate, which we began offering in January 2010," said CEO Greg Smith. "How many times does your card company write you to tell you they lowered your rate?"

Smith said PSECU is making the move to further differentiate the credit union from other card issuers. "Consumers have been so abused by the card companies before and after the passage of the Card Act of 2009. PSECU continues to prove that we have a credit card program members can trust."

PSECU has over 183,000 Visa cards, making it the fifth-largest card issuer among CUs in the U.S. Smith said the economy is driving more people to PSECU and getting members to use more services. "We grew the credit card portfolio by 22% last year. As members were getting notices in advance of the Feb. 22 effective date for the CARD Act, our credit card program mushroomed."

The one-percentage-point lower rate will generate interest savings for members of roughly $390,000 annually on the existing $39 million in balances. "When you consider we don't charge a transfer fee, and the average transfer fee rate is 3% to 5% of the balance, that's another savings for members of nearly $2 million," said Smith.

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