WASHINGTON (11/16/12)--The Credit Union National Association (CUNA) outlined the benefits of credit cards offered by credit unions for a Bankrate.com article that also was carried in Fox Business as well as on Yahoo!Finance in Canada.
CUNA Chief Economist Bill Hampel is quoted extensively in the article, which discussed the ins and outs of credit unions' credit cards.
Hampel pointed out that one of the most flattering feature of a credit union card is the annual percentage rate (APR), which is often several percentage points below those offered at big banks. The average APR for credit union rewards cars was 9.38% as of Nov. 1, compared with 12.89% for big banks, said the article, quoting Informa Research Services.
Credit unions also offer a variety of options such as secured cards, rewards cards and platinum cards, he noted.
Credit unions don't engage in egregious practices such as double-cycling billing and retroactive rate increases and are bound by provisions of the Credit Card Accountability, Responsibility and Disclosure Act, just like big banks, he said.
Hampel pointed out that credit unions take fewer financial risks so credit limits may be lower at first than bank limits, but if the consumer consistently pays on the card every month, credit unions will quickly increase the limit.
He also said that membership requirements aren't a deterrent. "Everybody can typically find three to five credit unions that they're eligible to join."
Ondine Irving, owner of Card Analysis Solutions, a credit union consulting firm, also noted in the article that credit unions don't typically charge balance transfer fees and they have lower late fees. They also provide a longer grace period for late payments (five days vs. one day at big banks) and won't raise an interest rate after one late payment.
To access the full article, use the link.