Why Credit Union Credit Cards Are Better Than What’s in Your Wallet

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As the Move Your Money movement preaches, there’s good reason for shifting your savings and checking accounts to local banks and credit unions. There’s just as much reason to change the kind of plastic you use.

Forbes lists five reasons you should be using a credit card issued by a non-profit credit union—and not one by a for-profit company. For instance, interest rates. Get your card one way, and there’s a ceiling; the other way, and the sky is the limit:

Federal law prohibits federal credit unions from charging interest rates higher than 18%. For-profit credit card companies, however, have no restrictions on the interest rate that they can levy on account holders.

Beyond the cap, credit union cards general charge better rates period:

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 by the Pew Foundation, a nonprofit 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 17.9%.

And of course, there’s a difference in 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 customer pays $20 for paying his bill late or going over his credit limit; at banks, the average penalty was $39.