Forbes.com Blog Talk Up CUs' Low Credit Card Rates

Friday, January 14, 2011 9:53:00 AM

A blog posted on Forbes.com on Thursday compares credit union card credit fees with hose of big banks. "Credit Union Card or Bank Card? Take a Look at the Fees" gives two examples of card offers: Card A, which has a $35 penalty fee and 9% APR; and Card B, which has a $15 penalty fee and 11% APR.

The article points out that "both offer the same bottom-line profitability, but one is much more enticing for advertisers", consumers are tempted by Card A, because its fees are shrouded "under the veil of 'that will never happen to me'." While huge national banks all tend to lean towards offers like Card A, according to Forbes.com's research, a large percentage of credit unions lean towards offers like Card B, with lower fees.

This finding may mislead consumers to think that credit unions would have higher APRs than banks to make up for the lower fees, but this is not the case, the article states. Datatrac data shows that credit unions actually have lower average credit card APRs than banks.

To help illustrate the benefit of choosing a credit union credit card over that of a bank even further, the article includes a easy-to-read chart that compares a typical credit union's late payment fee ($20) and over limit fee ($0) to the late payment fee ($35) and over limit fee ($35) of a typical bank.

The article can be found in its entirety at http://blogs.forbes.com/moneybuilder/2011/01/13/credit-union-card-or-bank-card-take-a-look-at-the-fees/?boxes=Homepagechannels.
 

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