Why More People are going for Credit Union Credit Cards?
Posted by LorMet Webteam on Thu, Nov 19, 2009 @ 10:40 AM
Nowadays, more and more people are choosing credit union credit cards over credit cards issued by banks. Since a credit union is a nonprofit financial institution, its main objective is to serve the interests of its members. This is why credit unions are able to offer credit cards with better terms than the banks. Let’s take a look at some of these advantages.
According to a study on credit cards released by the Pew Health Group, the largest credit unions in the United States offered average advertised interest rates that were 20 percent less than those of the banks. Based on a sample size of 400 financial institutions, the results are quite conclusive. In terms of interest rates on cash advances, the highest rate charged by credit unions was 13.75 percent while the highest rate charged by banks was 21.24 percent. It’s no wonder that more people are going for the smarter choice.
No matter your commitment to the cause, it’s inevitable that you may miss some payments, sometimes. If you happen to miss your payment deadline for your credit card, you are penalized an average of 28.8 percent on your unpaid balance by your bank, against only 17.9 percent by a credit union. On top of that, you will also be charged a fee for late payment or overshooting your credit limit. The study shows that credit unions charge an average of $20 while banks charge an average of $39.
Are you paying too much in interest? Contact your local credit union to find out their terms.