HOUSTON—Banks have begun raising credit card interest rates as credit card reform looms. Reforms are set to begin February 22, 2010, but a bill in Congress seeks to move the date up to December 1, 2009. Some bank rates are now higher than 30 percent, even for consumers with good credit.
But experts say credit unions offer a much better deal.
"We could only have our rates as high as 18 percent, so we couldn’t ever get above 18 percent," said Ron Burniske, CEO of Chartway which is the largest credit union in Houston.
Burniske said rates are low at credit unions because they are almost like a non-profit enterprise, run by a volunteer board and owned by members. The members are the customers.
To become a member of a credit union, you have to belong to a specific group.
Other requirements include all those who live, work, attend school or worship within the area surrounded by the 610 Loop or anyone who lives within the Houston city limits.
Credit unions also require customers to open a savings account with as little as $5.
There are credit unions specifically for teachers, firefighters, labor union members or employees of a particular large entity like Johnson Space Center or Harris County.
At Member Source Credit Union rates have been lowered to a promotional rate of 5.99 percent until next June.
Also credit unions charge no fees on their cards.
"(There is also) no cash advance fee, no balance transfer fee," said Burniske.
