Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Lowest card rates come from CUs says SNL
CHARLOTTESVILLE, Va. (8/1/12)--
Click to view larger image Click for larger view
When it comes to platinum credit cards and reward cards, credit unions have the lowest rates in the nation, beating bank and thrift rates by nearly 200 basis points, says a new study of interest rates.

The national average rates for the two card products hover around 10% to 11%, but some credit unions studied offer half that, according to Charlottesville, Va.-based SNL Financial LC, which conducted the study.

Total credit card loans at U.S. credit unions stood at $36.55 billion as of March 31--a 34.62% increase over $27.15 billion in 2006.  SNL Financial said credit card loans made up 6.31% of credit unions' total aggregate lending portfolio, compared with 5.37% in 2006.

The statistics are comparable to statistics compiled by the Credit Union National Association (CUNA) in its U.S. Credit Union Profile.  Credit unions saw a 6.7% growth rate in overall credit cards during 2011, with cards making up 6.3% of total loans, according to CUNA. To put the growth rate into perspective, the 6.7% can be compared with 7.6% cards growth rate in 2007, 6.4% in 2008, 3.1% in 2009, and 3.9% in 2010.

Click to view larger image Click for larger view
For reward card rates, the 16 credit unions with the lowest rates have rates ranging from 5.25% to 7.99%. said SNL Financial.  That compares with rates for the 16 lowest-rate banks and thrifts from 7.24% to 9.24%. The average national rate is 10.86%, said the study report.

The lowest reward card rate--5.25%--is offered by Advantage FCU, Rochester, N.Y. Other credit unions offering the lowest rewards card rates are: Warren FCU, Cheyenne, Wyo., with 6.25%; Sandia Area FCU, Albuquerque, N.M., 6.49%; Apple FCU, Fairfax, Va., 6.74%; and GTE FCU, Tampa, Fla., 6.799%, said SNL Financial. (See SNL Financial chart, "U.S. credit unions with lowest reward credit card rates.)

Three banks in Louisville, Ky.; Warren, Pa.; and Columbus, Ga., tied for the lowest rate among banks and thrifts: 7.24%

Click to view larger image Click for larger view
Platinum credit card rates for the 15 credit unions with the lowest rates ranged from 3.25% to 6.25%. That compares with banks and thrifts' lowest rates of 5.15% to 7.25%. Credit unions with the lowest platinum card rates were Educational Systems FCU, Greenbelt, Md., with 3.25%, followed by Town & Country FCU, South Portland, Maine, with 3.99%; Energy One FCU, Tulsa, Okla., with 4.25%; Sandia Area FCU with 4.99%; and San Francisco (Calif.) FCU with 5.15%. (See SNL Financial chart: U.S. credit unions with lowest platinum credit card rates.)

First Tennessee Bank N.A. of Memphis, Tenn., had the lowest rate among banks and thrifts, at 5.15%. Three other banks offered rates under 6%.

The data are based on regulatory filings for the quarter ended March 31 and are rates shown for the most creditworthy borrowers, said SNL Financial.

Click to view larger image Click for larger view
The SNL information is just part of the story, however. In addition to providing lower interest rates on outstanding balances, credit unions also charge lower annual fees and lower late fees, according to rate and fee data on  Informa Research Services.

See Informa's Credit Card Products chart (right)  for a comparison of rates, annual fees, and maximum late fees for credit unions and banks in platinum cards and reward cards. Credit unions are lower on all fees as well as interest rates.

A consumer who has a platinum card carrying an average $7,500 balance and who is late on five payments will spend about $230 less per year at a credit union than at a bank, on average," said Mike Schenk, CUNA vice president of economics and statistics.

"A consumer who has a reward card carrying a similar average $7,500 balance, and who is late on five payments, will spend about $420 less per year at a credit union than at a bank, on average," he added.
Other Resources

RSS print
News Now LiveWire
.@CreditYOUnion captures voices of #100MM loud, proud at @GAUnitedCU See #NewsNow Thursday for more
10 hours ago
Ill. @GovernorQuinn signs patent troll law http://t.co/ugWf8zHpCm via @CrainsChicago
11 hours ago
.@MBAMortgage : Mortgage apps increased 2.8% from one week earlier for week ending Aug. 22.
12 hours ago
Franchise businesses may face higher breach risk with POS systems HT @briankrebs http://t.co/LGE46DUk15
12 hours ago
About 1 in 3 consumers use plastsic for in-person purchases of less than $5, according to @CreditCardsCom survey.
14 hours ago