For the third time in a year and a half, the Pacific Service Employees Credit Union has lowered interest rates on its Visa gold and standard cards.

The 1% reduction dropped the annual percentage rate to 12.9% for both cards,

According to Tom Smigielski, president and chief executive officer of the Concord, Calif.-based credit union, the rate cuts came in response to the huge success of the card program, which has "exceeded all expectations."

"After reaching profitability in only seven months, we began lowering the interest rates on our cards," he said.

Its Visa program, launched in May 1992, has signed almost 10,000 cardholders, who have run up $11 million in outstanding balances.

Since the program began, interest rates have dropped by four points on standard cards and three points on gold cards.

"Our pricing requires sustained profitability, and even after this latest rate reduction our program will continue to be profitable for us," Mr. Smigielski said.

The credit union caters to the employees and retirees of Pacific Gas and Electric Co.

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