Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
If you’re chasing maximum rewards and benefits, large credit card issuers, including American Express, Capital One, Discover and Chase, generally offer the best options. But if savings are a higher priority for you than earning, don’t overlook small credit card issuers.
A Consumer Financial Protection Bureau analysis finds that credit cards from small banks and credit unions may offer lower annual percentage rates and fees than cards from large issuers. These credit cards may fly under the radar but could offer good value and help you minimize costs.
If you’re looking for a low-cost credit card, small issuers may have just what you need. The CFPB analysis shows that credit cards from small banks and credit unions may offer:
A lower credit card APR can save you hundreds, potentially thousands, per year. The CFPB analysis finds that the difference in reported purchase APR between large and small credit card issuers results in an average annual savings of $400 to $500 on an average balance of $5,000.
Another savings opportunity is in annual fees. According to the CFPB analysis, large-issuer credit cards were three times more likely to include an annual fee than small-issuer cards. Of the cards that had annual fees, the average fee amount for large issuers was about 70% higher than that of small issuers.
While the cost of using a card from a small bank or credit union may be lower, you might get some of the same perks you’d get from a card offered by a major issuer. JT Genter, editor in chief of rewards and travel tracking tool AwardWallet, says small-issuer cards are often on a major credit card network. These cards may access card tiers such as Visa Signature, which offers the same benefits whether the card is from a large or small issuer.
If you’re seeking simplicity and cost savings, these credit cards from small issuers are compelling options.
The Alliant Cashback Visa Signature Card from Alliant Credit Union offers potential savings with no annual fee and a low APR. There’s also no foreign transaction fee, and you can earn unlimited cash back rewards.
Though it doesn’t earn rewards, the M&T Visa Credit Card from M&T Bank can offer interest and fee savings. This card boasts a low variable APR and a 0% introductory APR on balance transfers and purchases for the first 12 months.
A secured card, the Navy Federal nRewards Secured Credit Card from Navy Federal Credit Union requires a $200 security deposit but is light on fees, including no annual fee. It earns rewards and has a low 18% variable APR.
A simple credit card, the Simmons Visa from Simmons Bank has no annual fee, a low APR for purchases and a 0% introductory APR for 12 months on balance transfers completed within 60 days of opening an account. It also has cardholder benefits including travel accident insurance and car rental coverage.
You can earn 1.8% cash back on all purchases with the Citizens Cash Back Plus™ World Mastercard® from Citizens Bank. This card also offers savings with no annual fee, no foreign transaction fee, no penalty APR and a 0% introductory APR on balance transfers for the first 15 billing cycles.
As you consider credit cards from any issuer, large or small, understand how these factors align with your financial needs and preferences.
Small bank and credit union cards may offer an interest-savings advantage. However, “interest rate only matters if you’re planning on carrying a balance,” says Genter.
Chip Chinery, personal finance blogger at Chip’s Money Tips, says interest doesn’t factor into his credit card choices at all. “I don’t care what the interest rate is because I will never charge something without having the cash to pay it off in full.” Instead, he focuses on the perks, such as cash back and other rewards he earns for using a card.
Genter encourages card shoppers to not take benefits for granted. While he points out that zero fraud liability and online payments are standard for credit cards, benefits such as purchase protection can offer savings if you buy something and it breaks quickly.