Credit Unions Offer Better Cards Than Major Credit Card Companies

The continuing credit crisis has placed a lot of strain on the finances of many American consumers. High interest rates, high fees, new fees and more have become the norm for credit cards issued by the major credit card companies in the U.S.

Consumers are becoming desperate over how they are going to handle their financial woes, especially since the predatory practices of major credit card companies don’t seem to be stopping. The Credit CARD Act, specifically created to stop these predatory acts, is already fast becoming obsolete as credit card companies raise rates and fees well ahead of the Credit CARD Act being able to do anything about it. Lawmakers seem to have dropped the ball when they gave credit card companies until February of next year to adapt to the new credit card legislations. Now they have decided to move up the activation earlier but, since credit card companies have already raised interest rates and fees to record highs, that may already be an exercise in futility.

What consumers may be missing, however is that there is a better choice than the expensive credit cards that major U.S. credit card companies are offering. According to research done by the Pew Charitable Trust, while credit cards from major credit card companies are expensive, those that are coming from credit unions are not so. The group’s report shows that the median of the interest rates offered credit unions are lower than those being offered by credit card companies by 20%. Also, while credit card companies charge penalties on average 28.8% for missed deadline payments, credit unions average at 17.9%. Cash advances are cheaper at credit unions as well with charges going as high as 13.75%. From credit card companies, that would cost 21.24%.

To be sure, major credit card company credit cards do carry certain advantages not usually found with credit union credit cards. For instance, their reward and frequent flier mile offers are much better. These credit card companies also used to offer no interest offers for one year for balance transfers as well. That’s no longer widely available in the current credit industry, however and a lot of consumers are probably more keen at keeping their credit expenses down than on how much reward points and frequent flier miles they are getting for every purchase. Credit cards from credit unions are therefore a very attractive option from major credit card company credit cards.

Some consumers might be turned off by the perceived exclusivity of credit unions. Although credit unions generally do limit their membership, a lot of credit unions are much more open. For instance, the Pentagon Federal Credit Union accepts anyone who signs up for the National Military Family Association Membership. Interested consumers can try searching for a good credit union through the Credit Union National Association website.