Friday, 22 June 2012

Credit Union Credit Cards Balance Transfer

Credit union cards might not be for everyone. Rewards cardholders may prefer the more generous rebates of major bank card issuers, while those with large balances and high interest rates might benefit from a credit union-issued credit card. Weigh the pros and cons of credit union cards before you make a switch.

Lower fees and interest rates. Consumers who routinely pay a few days late or carry a balance may find that a credit union card is much cheaper to use than a bank-issued card.

Besides lower APRs on new purchases, penalty rates on credit union cards are also lower than on bank cards. Credit union cards imposed a median penalty APR of 17.9 percent, while bank cards charged 28.99 percent, according to the Pew Safe Credit Cards Project.

Half of the credit union cards surveyed didn't even charge penalty interest rates, and over half of those that did imposed it only when the account was 60 days past due, which meets the CARD Act restriction on retroactive rate hikes. Only 10 percent of bank cards didn't charge a penalty rate.

Many credit union cards don't charge a balance transfer fee. Consumers who haven't been able to negotiate a lower interest rate on their bank card may enjoy a fee-free, or low-cost, balance transfer to a credit union card.

The Pew study found that only 25 percent of credit union cards charge a fee to transfer a balance from another card, compared with 88 percent of bank cards surveyed. The median balance transfer fee on credit union cards was 2.5 percent, compared with 3 percent on bank-issued cards. All of the credit union cards that charged a balance transfer fee also set a maximum fee, while only 13 percent of bank cards that charged a fee also capped it. The median cap for credit union cards was $50 and $75 on bank cards.

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