Money Matters: Credit Union Cards

In the last four months, company credit cards are tacked on new fees, changing conditions, that you keep your account and interest rates, some even over 30 percent. These borrowers are finding ways to increase profits before the reform of the rules of the credit card to come into force in February. A new study by Pew Research finds what he calls a better solution: a card from a credit union.

They look like they have the same work. But the cards that are issued by a credit union much different than a bank.

"We design our programs with low interest rates, lower fees, no annual fees and grace periods are more favorable," said the president of the Sioux Empire Federal Credit Union, said Jeff Jorgensen.

For example, the Sioux Empire Federal Credit Union 7 Fees for 11 percent interest on their cards with no annual fee. Late fees are only $ 12.50, compared with the standard set-$ 30 late fee by most major card issuers charge. And here is a big difference. The interest rate on cash advances is the same as purchasing, while the banks charge up to 22 percent.

Jorgensen said the fact that funds local nonprofit and make a difference.

"We are not trying to have our credit cards to people who move in California or New York to live. They are not for the membership. The geographical area is limited to our members a common bond. Because it has a common bond, we can things a little differently, "says Jorgensen.

Jorgensen, said reducing the credit risk and by federal law, the interest rate may not exceed 18 percent.

"This goes against the entire South Dakota, without usury laws. This has attracted issuers of credit cards in our state. The law does not even apply to credit unions," said Jorgensen.

Jorgensen said that forced the only change in the credit card on his body to act, pushing back the frontier to pay a few days.

"The act of credit card we have ever caused any trouble. For us it's time. All these people should do these things because it is already in favor of consumers," said Jorgensen.

And what do the banks say about the difference between the cards and the credit unions? The banks say credit unions have an unfair advantage because they pay taxes on federal income, are exempt credit cooperatives.