Credit Unions May Have Lower Interest Rates

The Credit Card Disclosure Act which goes into effect on Feb 22, 2010, prohibits raising the interest rates during the first year a credit card account is opened, ban interest rate hikes on existing balances and require promotional rates to last at least six months.

Congress gave the industry nine months to prepare for the changeover. Many banks, as expected, used this time to put the squeeze on their current customers and boost income from new cardholders.

My bank that I have been with for nearly 20 years, notified me by mail on Christmas eve. Angry, I thought I would check into credit untion rates and move all of my accounts as soon as possible. I'll post a blog on my findings soon.

You’d be smart to check a few credit unions. The Safe Credit Cards Project at the Pew Charitable Trusts compared credit cards issued by the largest credit unions to those from the biggest banks. Credit unions had both lower interest rates and lower penalty fees.

“The advertised interest rates were 20 percent below what they were at the banks and penalty fees were half as much,” says project director Nick Bourke.

You can compare rates at sites such as lowcards.com, bankrate.com, credit.com, cardratings.com and creditcards.com.