I think what many of the major banks are doing to their credit card holders is a travesty. To fight back I want all of you to look into Credit Union credit cards as an alternative. Please read the following scoop on how to find a good Credit Union Credit Card written by one of the experts in this field. Also please check out her blog and stay in touch with her.
Ondine Irving
Founder of Card Analysis Solutions
http://cardanalysis.blogspot.com/ Assisting credit unions in developing fair and ethical credit card programs for their members
As you begin your quest for a BETTER credit card than a bank (ie a Credit Union Credit Card), you must be aware there is a
small percentage of credit unions whose programs are actually "issued" by banks.
Of the 7,900 credit unions in the USA, roughly 50% issue
their own card programs. There remain about 10% of credit unions whose card programs are owned by our "friendly bankers".
Your best bet is to get a credit card from a
credit union that owns their own program.
Some background: Back in 2002, there was a surge of credit unions "selling" their portfolios. That is about the same time I started Card Analysis Solutions for the benefit of credit unions and to educate them how to manage their card programs more effectively and ward off any more sales. The banks (MBNA, Elan, Infibank and others) realized there was a great "untapped" potential within the credit union market and they aggressively approached credit unions with very enticing premiums.
It is no secret within the credit union industry, that
I am strongly opposed to credit unions selling their credit card portfolios to banks. But in all fairness, some credit unions needed capital to either build new branches or utilize the funds for other purposes.
The good news is some of the credit unions that had previously sold, are now coming back into the card issuing business based on feedback from their members. I still hold true that the credit union members were being "sold" - not just the credit card portfolio.
So how do you know if your credit union is operating their card program via a BANK? - Call them and ask them outright
- Go to the credit card section of your credit union website
- Go through the motion of "applying" for a credit card online
- Be aware of where the link takes you...ie a third party website
- Review the "Terms & Conditions" of the Credit Card Application
- Scroll towards the bottom and search for terminology such as Infibank, Elan, FIA Card Services, etc.
- Reward programs named "Worldpoints" (MBNA/FIA)
Typically, these credit union card programs will look JUST like a bank card (since they are issued by a bank):
- Variable rates
- Separate and often HIGHER cash advance/balance transfer APRs
- Cash advance fees ranging from 3%-4%
- Balance transfer fees ranging from 3%-4%
- Late and Overlimit fees in the $35-$39 range
- Minimum Finance Charge Fees
- Shortened grace periods
- APR Penalty rates for paying late
So do your homework. Again, the MAJORITY of credit unions have FAIR and ETHICAL credit card programs, but do not assume all Credit Union Card Programs are created equal. You may need to shop around.
As a reminder, this is what is "out there" with many credit unions:
- Fixed Rates ranging from as low as 7.95% up to 17.95% based on FICO score (Federally chartered Credit Unions are prohibited from charging more than 18%)
- $20-$25 Late Fees with a 5 day payment grace period (not hours after payment is due)
- No Penalty APRs
- No Separate Cash Advance/Balance Transfer APRs
- No Cash Advance or Balance Transfer Fees (why charge the member to bring a balance over?)
- No Annual Fees
- Generous Reward Programs (if you're into that: points to be redeemed on ANY airline with no blackout dates)
