The 49,000-member Los Angeles Federal Credit Union has partnered with Shop LA, a city-sponsored effort to promote Los Angeles as a retail destination, to launch a Visa card that will triple the rewards points for purchases made in the city.
The Shop LA City Visa Platinum Plus card will carry a 0% introductory annual percentage rate for six months then settle into a rate that will be as low as 9.90% for borrowers with the highest credit quality.
The card's rewards can be redeemed for merchandise, travel and gift cards as well as on better rates on other loans such as auto loans, the CU said.
The card also has a component that allows the city to earn one dollar for every $10 in sales taxes paid to go toward police, fire, libraries and parks.
John Dea, CEO at Los Angeles Federal, said the CU had been approached by the city about the card and the CU believed it fit well into the CUs existing mission.
“City officials approached us about creating then launching a Visa card rewards program that would help boost the city sales tax revenue and help Angelinos save money while shopping locally,” Dea wrote in response to questions. “LAFCU is the designated credit union serving Los Angeles City employees, and it made sense for us to work together on a project that will benefit L.A. and Los Angeles residents.”
He said the program is expected to run for at least three years and that he didn't know if the city had approached any other financial institutions about the idea before or after it came to LAFCU.
He also indicated the CU expected the card to be a success, even if it had not put any benchmarks into place to evaluate success or failure.
“We do not have a specific goal in mind. The aim of the Shop LA City Visa card program is to support L.A. by increasing the city’s sales tax revenue and encouraging local residents to shop in Los Angeles,” Dea wrote. “We feel confident that this Visa card program with triple rewards and a low card rate will be successful.”
The $720 million asset credit union is headquartered in Glendale and offers six other card offerings, including two share-secured cards and a student card.