CUs beat banks on platinum card rates

August 01, 2012

CUs beat banks on platinum card rates

Credit unions were found to offer the lowest rates on rewards-based and platinum credit cards in a recent analysis by SNL Financial, which reported the credit union card rates at nearly 200 basis points below rates at banks and thrifts as of March 31.

SNL Financial says the average rate charged on such cards nationally is about 10 percent to 11 percent. Its analysis, based on information filed with regulators, showed credit unions charging nearly 200 basis points less than banks and thrifts.

SNL says it based its analysis on data from selected institutions. Within that group, it said, most of the credit unions offering the lowest average credit card rates are smaller: One-third of the 16 they chose to highlight having $100 million to $200 million in assets; just four had more than $1 billion in assets.

Of the 16 credit unions highlighted in the report, Advantage FCU of Rochester, N.Y., charged the lowest – an average 5.25 percent – on reward cards. The lowest average platinum card rate in the group, 3.25 percent, was offered by Educational Systems FCU of Greenbelt, Md. At the banks reviewed, the lowest average reward card and platinum card rates reported were 7.24 percent and 5.15 percent.

The SNL findings agree generally with an analysis published jointly by NAFCU and DataTrac Corp.

As of July 31, the data show the lowest platinum card rate charged nationally by credit unions was 3.99 percent; at banks, it was 5.15 percent. The DataTrac data show also that credit unions were charging an average 9.22 percent on platinum cards as of July 31; banks were charging 10.5 percent. The high rates charged by credit unions and banks were 17.99 percent and 26 percent, respectively.

More of the NAFCU/DataTrac comparisons are online.

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