Theres a battle raging. And were not talking about Good vs. Evil. Its the battle for consumers wallets and for survival in the credit card market. Thats why some 7,000 credit card issuers are deluging you and other consumers with their latest, greatest, gotta-have, must-see credit card offerings.
Whats a shopper to do?
Fall back on the basics—Whats it going to cost you to use the card? A lot depends on how you use the card.
If you carry over a balance, a card with a low annual percentage rate (APR) is what youre after. Credit union variable-rate credit cards charge an average APR currently more than one percentage point lower than bank credit cards.
If you always pay your balance in full, interest rate isnt an issue so choosing a card with no—or the lowest—annual fee makes sense. Fewer credit unions than banks charge annual fees to begin with and, of those that do, the average fee is more than $2.25 less than the annual fee on the average bank credit card.
Be sure to check out the fees—With all the attention surrounding interest rates, especially short-term teaser rates, it seems many card issuers have switched tactics to rely more heavily on fees as their moneymaker. According to the U.S. Public Interest Research Group, government data show credit card fee income is one of banks fastest-growing sources of income.
In particular, late fees on bank credit cards are soaring, with the most exorbitant topping out at $35. To add insult to injury, some issuers are charging a penalty interest rate on top of a late fee. A relatively new cash cow, the penalty rate hikes a cards interest rate—permanently—above 20% once the cardholder misses a payment due date. Ouch!
And watch for shortened grace periods: Some have shrunk from 25 days to 20, leaving cardholders with an even narrower window of opportunity for mailing payments on time.
For the straight scoop about the Pacific Advantage CU credit card program, click here or call our toll free number at (800) 444-5504. And stop paying more for credit than you have to.
Copyright 2002 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.
