Chris Johnson got a surprise when he opened his mailbox in late September.
“I saw bills, bills and bills,” Johnson said. “And then I saw what I thought was junk mail.”
Instead, the Auburn resident, a Sound Transit Link light rail operator, found himself holding a notice from his credit union, BECU, telling him they had changed his interest rate. He has been a member of BECU for eight years.
“I couldn’t believe it,” Johnson recalled. “It was a drop in (annual percentage rate) on my credit card.”
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Johnson was a recipient of BECU’s Reprice Program.
The credit union, every year, looks at all their member lending accounts: credit cards, line of credit, auto, RV and boat loans.
“I have two kids and bills to pay,” Johnson said. “It was like God-sent.”
Johnson was one of 40,000 members who got their rates reduced — an estimated savings of $2.7 million over the life of the loans, according to BECU. About 75 percent of those were in credit card debt.
The process is simple, according to Scott Strand, BECU’s senior vice president and chief lending officer.
“When their credit score improves, we lower their rate,” Strand said.
But if a member’s score stays the same or goes down they won’t get their rates raised either, he said.
Though the credit union looks at scores quarterly, the program is only conducted once a year. Neither the checks nor the program are inquiries, which can hurt credit scores.
In late September, the average balance for accounts at BECU that had a month-end balance was $3,950.
The loan rate reduction program started 12 years ago with credit cards. This year, boat and RV loans were added.
There are conditions to the program. Members can’t be past due on loans, for instance.
BECU has just under 1 million members, not all of whom have a loan.
Over a quarter of BECU’s members have benefited from the program, Strand said. He estimated $10.8 million has been saved by customers.
BECU doesn’t limit the program to just one loan.
“If you’re a member that has an auto (loan), credit card, line of credit and an RV loan, you could potentially qualify for a reduction on every one of those products,” Strand said.
Strand said being a member-owned, not-for-profit cooperative gives them the ability to offer this program.
“We really want to make sure we return our members’ money to them,” he said.
The rate reduction varies by product and customer.
Johnson, 40, got his rate reduced from 13.1 to 11.15 percent.
“It doesn’t sound like a lot but 2 percent is a lot when you’re counting your pennies,” Johnson said.