Since the second part of a federal bill known as the CARD Act, credit cards have become a lot friendlier to consumers. Credit card companies are now prohibited from a long list of former dirty business practices some engaged in, ranging from switching the date that a customer’s bill was due to retroactively raising rates.
But because so many of the outlawed practices were also huge revenue generators for the companies issuing cards, some have responded by preemptively raising rates across the board and introducing new fees. Citigroup informed some customers that they would owe $90 if they don’t charge at least $2,400 a year, while American Express and Bank of America have each introduced annual fees for some cards as high as $100. Even those with pristine credit are paying at least two percentage points more in interest this year, according to a study by LowCards.com.
If you feel like your credit card company is trying to bleed you with new fees, there is a better way: opt for a credit card issued by a credit union. These not-for-profit financial institutions are owned by members, who typically share some sort of affiliation like working at the same university or being a member of a teacher’s union. While credit unions issue the same Visa and MasterCards as for-profit institutions like JP Morgan Chase and Wells Fargo, these cards often come with a number of protections and benefits that you won’t get anywhere else.
Here are five reasons to switch to a credit card issued by a federal credit union:
1. Interest rate caps. Federal law prohibits federal credit unions from charging rates higher than 18%. For-profit credit card companies, however, have no restrictions on the interest rate that they can levy on account holders. The average interest rate for cards issued by for-profit institutions is currently 16.7%, according to Credit Card Monitor, though many customers with less than perfect credit often pay rates above 20%. If you habitually carry a balance, having a fixed limit on the amount of interest you could be charged could save you thousands of dollars a year.
2. Lower interest rates. The interest charges on credit union issued cards were 20% lower than the same cards issued by banks, according to a study released in October 2013 by the Pew Foundation, a non-profit public interest group. In a survey of 400 cards, the study found that the best advertised rate for credit union cards was 9.9%, while the lowest advertised bank rate was 12.2%. The highest advertised rate for a credit union card was 13.7%, which again was lower than a bank’s at 17.9%.
3. Lower fees. The same Pew study found that credit unions levied lower fees and other penalties for their credit card customers than banks. The average credit union member pays $20 for paying their bill late or going over their credit limit; at banks, the average penalty was $39. Banks also charged as high as 21% for a cash advance, compared with a high of 13.7% rate charged by credit unions.
Did you know First Financial’s VISA Platinum Credit Card only has a 1% cash advance fee of the advance ($5 minimum, $25 maximum)? Plus, there are no balance transfer fees at First Financial – AND you’ll earn rewards on all your purchases!* Learn more about our card by clicking here.
For a limited time – if you are approved for a balance transfer of $5,000 or more to First Financial’s VISA Platinum Credit Card, you will receive 10,000 bonus CURewards Points! You can apply for the balance transfer by stopping into any branch or calling 866.750.0100 to be sent a balance transfer request form.**
4. Credit unions are member-owned. Every credit union is owned by its members. That means that these institutions do not have the same pressures of Wall Street banks to maximize revenue in order to please investors. Instead, profits on credit cards and other loans go back to credit union members in the form of lower loan rates and better account dividends.
5. Increased service. 70% of credit union members thought that their financial institution put members’ financial interests above their own, according to a recent survey published by Forrester Research. 58% of regional bank customers had the same positive view toward their financial institution. Wells Fargo had the highest customer satisfaction of any major bank, with a scant 40% positive rating.
The National Association of Federal Credit Unions operates a website, culookup.com, that can help you find a local credit union. Each credit union has its own membership requirements. Some are broad, for example: the DVA Credit Union, which is open to anyone who lives, works, worships or attends a school in Washington, D.C. Others, such as the Ukrainian National Federal Credit Union, are restricted to members of a religious organization.
To become a member of First Financial, you need to live, work, worship, volunteer, or attend school in Monmouth or Ocean Counties in NJ. Once you are a member, your immediate family members are eligible for membership too!***
First Financial’s VISA Platinum Card comes fully loaded with:
- Rates as low as 10.90% APR*
- No Annual Fee
- No Balance Transfer Fees
- Platinum line of credit up to $25,000
- Travel Benefits
- Zero Fraud Liability
- 24/7 Customer Service
- And – for each purchase you make with your Platinum Card you’ll earn CURewards redeemable for travel, merchandise items, and merchant gift cards!
*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.
**Additional bonus points will be reflected within 30 days from the balance transfer approval and can be viewed when signed into your VISA Platinum Card Account online through Online Banking. In order to redeem bonus points, an offer reference must be made to a First Financial representative. Bonus points can only be redeemed one time per member, on an approved balance transfer of $5,000 or greater during the promotional period of 4/28/14 – 12/31/14.
***$5 in a base savings account is your membership deposit and is required to remain in your base savings account at all times to be a member in good standing. All credit unions require a membership deposit.
Click here to view the article source by David Randall of Forbes.