CHARLOTTESVILLE, Va. – Credit unions “clearly outshine” banks when it comes to credit card rates, according to SNL Financial.
Credit unions came out on top both on “platinum” card rates and rewards card rates. With an average rate of 5.25% on its rewards card, Advantage FCU, Rochester, N.Y., was well below the national average rate of 10.86%, SNL said. Similarly, Educational Systems FCU, Greenbelt, Md., was much lower than the national average of 9.85% for a platinum card.
“Interesting enough, the most competitive credit union rates easily outpace their bank and thrift brethren for lowest average credit card rates to the tune of almost 200 basis points,” SNL said in its report.
“Credit card loans have been growing consistently at U.S. credit unions in the past few years, but slipped slightly in the first quarter of 2012.”
SNL reported total credit card loans at credit unions stood at $36.55 billion as of March 31, up 34.62% over 2006’s $27.15 billion. Credit card loans accounted for 6.31% of the total aggregate lending portfolio of credit unions at March 31, compared to 5.37% in 2006.
Smaller credit unions tended to offer the lowest rates on both rewards cards and platinum cards, SNL said, noting that around one-third of the 16 CUs on the rewards card list were $100 to $200 million in assets, and only four had more than $1 billion in assets. For platinum cards, the majority of the credit unions on the list are below $500 million in assets, with four above $1 billion in assets.