With so many credit cards on the market it can be hard to choose the right credit card, especially when it comes to finding the ideal interest rate. There are so many pros and cons to the multitude of credit cards on the market today that it can be a daunting task indeed. Your bank might offer you a credit card with rates and terms that seem attractive but with anything financial be it a loan, mortgage or in this case a credit card it is a good idea to look around for the best rates, terms and perks you can find.

I often get asked what the difference is between a bank credit card and a credit card offered by a credit union. They function the same way, you get a plastic card to make charges with, you get a credit limit, and your payment history will be reported to the credit reporting agencies. The main difference you will find between the two is the interest rate. In many cases your interest rate will be lower with a credit union credit card than a bank issued credit card. The main reason for this is credit unions are not for profit so they can afford to offer more attractive rates.

According to Informa Research Services, platinum credit cards offered by credit unions had on average an APR of only 8.87% versus the 10.36% average APR for the same cards issued by major banks. This might not sound like much but on a $10,000 balance this amounts to a savings of roughly $150 a year for having a credit union credit card. It is not just the interest rate you will save on however with a credit union issued credit card but also on annual fees and late fee charges as well. With credit unions everything is not about milking the maximum amount from customers.

Why then are credit union credit cards not as common as bank issued credit cards? For one in order to get one of these credit cards you have to become a member of the credit union. Most people are confused as to exactly what a credit union is. The fact of the matter a credit union acts much the same as a bank does, the main difference being that credit unions are not for profit. In fact interest rates for savings accounts are also better for customers in most cases at credit unions. Credit unions are not as easy to join however as they do have some qualifications in order to join them, while with a bank anyone can open an account provided that they have not bounced checks all over the place. Yet credit unions have been easing these restrictions for membership over the last decade.

I should point out that if you are looking for a credit card with very rich rewards programs you might want a bank issued credit card over a credit union one as the credit union cards tend to have weaker rewards programs if they offer one at all. Credit union credit cards are more suited for those looking to save money on interest rates.

There is an additional perk to obtaining a credit card through a credit union, and that is the membership itself to the credit union. Credit unions tend to approve loans to its members who already have accounts in good standing with the credit union, so down the line if you need a mortgage, auto loan or a home equity line of credit then if you have maintained your accounts in good standing, then you aught to be able to obtain the ideal loan through the credit union. The other perk with credit unions is as I’ve said earlier the interest rates on savings accounts are usually more attractive than a banks.