If, like many Americans, you’ve given up cash and are using credit cards for everyday purchases then you should care about fees, interest rates and the core values of the financial institution. Here’s why.
Take Your Pick
Not too long ago, credit cards were reserved for larger purchases like electronics. But as digital payment options become more commonplace, credit cards are an increasingly popular choice for consumers. According to CNBC, “one in 10 Americans no longer carries cash on a daily basis,” and for those Americans who are going cashless, “credit cards could be the most protected way to pay.”
A Card You Can Be Proud of
Credit cards can be a tricky contractual agreement – you're getting the opportunity to borrow money in exchange for being charged interest on that money.
Some companies can exploit this agreement, charging high interest rates, a wide variety of fees and imposing complicated rules.
Like any business you choose to support, you want your credit card company to do the right thing, like charge fair interest rates, keep rules simple, don't nickel and dime on fees. What's more, you want that company to care about the things you care about, such as supporting your local community, returning value back to members, and helping you get ahead financially.
Credit Union Credit Cards
What differentiates credit unions from banks is how they are structured. Banks have customers, but credit unions have members. As a member you are also an owner in a cooperative financial institution. So, credit unions tend to provide its member/owners with better rates on services and products overall.
At BECU, the financial health of our members is part of our core values; it's why we offer educational seminars on debt reduction and budgeting, and the lowest possible interest rates and fee structures.
Most credit cards have fees. Depending on the type of card, there may be annual fees, monthly fees, or even fees for foreign transactions. When it comes to fees, a for-profit credit card company tends to charge higher and more fees than a not-for-profit credit union.
An introductory offer may waive certain fees for a period of time. However, an introductory offer is not the same as a no-fee credit card or 0% Annual Percentage Rate (APR). Credit card companies and credit unions alike have introductory offers (e.g., 0% interest on balance transfers, or on purchases for a set number of months). Once that period is over, however, fees can jump. So make sure you know what to expect when the introductory period runs out.
BECU credit cards offer:
No annual fee
No balance transfer fee
No foreign transaction fee
No cash advance fee
0% 12-month introductory APR on purchases and balance transfers*
*Introductory offer for balance transfers is from the date of transfer, when transfers are completed within 90 days of account opening. After that, your variable APR applies. View credit card rates
Interest on Debt
Every time you carry funds from your credit card into your next transaction period you are incurring an interest on that debt. Interest rates vary depending on the type of credit card.
You should know your credit card's APR. Most credit cards offer consumers different APRs, depending on your credit score. BECU offers one of the lowest rates in the nation. In fact, if your credit score increases, we may actually lower your rate!
BECU rewards members taking steps toward financial health. As part of this effort, we periodically evaluate the credit rating for each member who has a credit card, line of credit, personal loan, auto loan, boat loan or RV loan with BECU. When members improve their credit score sufficiently, we may lower their loan rate (if they're not already receiving our lowest rate).
You Pay More for Late Payments
Paying your credit card late is costly. The default, or penalty rate, is the interest rate that you pay if you don't make your payment on time. This rate is different – usually much higher – than your card's standard APR. BECU charges a flat rate for late payment of $25.00, rather than a higher percentage rate.
Not only might you be paying higher interest rates for late payments, but you could also be damaging your credit rating.
If you're having trouble paying your credit card(s), or want to improve your credit score, BECU offers a free Financial Health Check to help you take action.
Rewards Cards vs Low Interest
ValuePenguin examined a wide number of types and brands of credit cards “to get a sense of what credit card interest rates are among different card types.” It boils down to two factors:
Travel and reward cards tend to have higher APRs and annual fees.
Non-rewards cards tend to have lower APRs and smaller or no annual fees.
So which credit card is right for you? It depends on whether you expect to carry a balance or pay off the entire debt each month.
If you expect to use your credit card for daily budgeted living expenses — and intend to pay off your card in full each month — then a rewards card may outweigh an annual fee or higher interest rate. Compare cards and do the math.
If you designate your credit card for larger purchases, or expect to carry a balance forward each month, then finding the lowest possible interest rate is a wise choice.
For complete details about BECU Rewards, please view the Terms & Conditions.
Membership Has Its Benefits
Thinking of switching from your existing credit card to one offered by a credit union like BECU? It is easier than you might think. First you'll need to apply to become a BECU member, then simply apply for your credit card.
You'll receive not only low credit card rates with no hidden fees, but all the benefits that come with being a part of the BECU family, and the power of having a stake in your financial institution. Make the switch today!