Consumer Reports notes value of CU credit cards

YONKERS, N.Y. (10/8/09)--Consumers angry about some of the tactics of credit card issuers lately should take control of their cards and fight back with strategies such as switching to a card from a credit union, says Consumer Reports in its just-released November issue.

"If you regularly carry a balance, you can beat the card issuers at their game by keeping your debt as low as possible and perhaps switching to a card from a credit union or a regional or community bank, which tend to charge lower interest rates and have more pro-consumer policies," said the report.

Consumer Reports repeats that advice for two of the three kinds of credit card users. Fifty-four percent pay off their balance in full each month, 33% carry balances up to $10,000 (with a median balance of $2,554) and 13% carry balances over $10,000 (with a median of $17,366).

For the low-balance cardholder, the first strategy listed is: "Roll over balances to cards issued by credit unions or regional or community banks. Credit cards from federal credit unions are capped at 18% APR (annual percentage rate), so even if you do fall behind on payments, you'll avoid the 30% default rates some major cards charge." It also notes that credit unions have the option to take funds from any deposit account to cover credit card defaults.

For the card users with more than $10,000 on their balances, among the advice is--again--"roll over balances to small bank or credit union cards. "

In a sidebar, the article looks at credit union cards from Pentagon FCU, Addison Avenue FCU, the Digital FCU.

The survey of 1,211 Americans in July found that:

• Of those surveyed, 21% said they were treated unfairly by card companies;

• Roughly 41% were highly satisfied with their card issuer, making credit cards "one of the lowest-rated services we cover," said Consumer Reports;

• Four-to-one respondents said they were charging less on their cards than they did last year; and

• Roughly 32% said they had paid off and closed a card since January 2008.

Resource Links

Credit Cards: Switch and Save statement stuffer

Credit Cards: Switch and Save drive-up envelope

Take Charge: Wise Use of Credit Cards member seminar kit

Consumer Reports press release

New Law Shows CU Credit Cards Still the Best statement stuffer

CUs in the Media