Credit cards: low rates, low fees, low penalties
Posted on December 2, 2007
Filed Under Advice, rates | Comments Off
Today the average bank credit card charges 13.69 percent, according to Bankrate.com. At credit unions it’s 12.16 percent, reports the National Association of Federal Credit Unions.
A 2005 report from the Woodstock Institute, a nonprofit economic development group, found no credit unions practicing “universal default,” a much criticized policy in which your lender raises your interest rate if you default on another lender’s loan.
Some credit unions won’t penalize you with higher rates even when you’re late on their own card’s bill. If they do, you’ll rarely pay more than 18 percent, compared with upwards of 30 percent at major banks.
One caveat: When it comes to reward cards, credit unions fall short. The rewards tend to be less rich (typically less than 1 percent in points or cash back vs. 1 percent or more from a bank card), and the cards may charge annual fees, so check the fine print.
Best deal on a credit card: Visa classic, Pennsylvania State Employees Credit Union: 9.9 percent
National bank average: 13.69 percent
By Carolyn Bigda