Credit unions have won America’s hearts. Why haven’t they won America’s wallets?

Americans pay a high price for their credit cards: in 2018, a total of $113 billionin interest and $18 billion in fees, adding up to roughly $1,000 per household in the United States. One reason for those high costs? Americans consistently choose bank-issued credit cards over the credit cards available from their local credit unions.

There are over 5,000 federally-insured credit unions in the United States, with a total of 122 million members. These not-for-profit, member-owned financial institutions generally offer credit cards at a much lower price than their for-profit counterparts. But credit unions only open about 4% of new credit cardaccounts, underperforming their success in other areas, like auto loans and personal loans, two markets where credit unions have outpaced banks in market share.

What Credit Unions’ Credit Cards Offer

As of September 2020, credit union credit card interest rates were, on average, 1.26 percentage points lower than the interest rates on bank-issued credit cards: 11.26%, compared to 12.52%.

 

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