MIRAMAR, Fla.—Tropical Financial CU here has brought back a “Black Friday” promotion it debuted last year and has seen great success in the promo’s opening days.
The 55,000-member, $550 million CU is offering members a $1,000 no-credit-check loan with a one-year term. Applicants must have proof of income, be members in good standing—in other words, have never caused the credit union a loss—and must have been members for at least six months.
The promo was launched on Monday, Nov. 18, and the CU will accept applications until 4 p.m. on Monday, Dec. 2. Amy McGraw, VP of marketing, told Credit Union Journal that Tropical Financial received 340 applications within the first three days of the promo, with 134 already funded and more in the pipeline.
Tropical promotes the loan to qualified members via direct mail postcards about a week before the offer goes live, along with two follow-up e-mails spread throughout the time of the promotion.
McGraw noted that many economists have come out against the idea of taking out a loan just for shopping, however she noted that “the idea of this loan isn’t to get you further into debt.” The loan is paid off in 12 months with a set interest rate (16.99%) and has no origination fees or extra out-of-pocket costs.
While there is no cross-selling involved with these loans, TFCU representatives do inform members about its Holiday Club accounts, along with having conversations about what other needs the member may have. “We do needs-based selling here, so it’s trying to find the loan that’s right for them, not just push loans on them,” said McGraw.
Members who apply for the Black Friday loans must also have a checking account with the credit union, and McGraw said that it’s not unusual to see members who had previously only had savings accounts set up a checking account in order to get the loan. Those accounts all come with a debit card, which in turn earns the CU interchange income.
Tropical Financial ran the same promo last year and booked 535 loans, a number McGraw said the CU expects to exceed this year.
“Obviously we have credit on all of our members, so last year we took a look at the average score after, and it was 652,” said McGraw. “These folks could have gotten better interest rates if they applied for a personal loan, but it’s that idea of being able to separate it, a very limited amount of time to pay it back, knowing what it was for—that compartmentalization of finances that’s so attractive about this offer. It works, our members love it, and it’s something that can be beneficial [to the member’s credit] as well.”
