Report: Credit Unions Are a Financial Services Haven

I thought the term "sub-prime" was some type of U.S.D.A. meat rating. That is until we all started hearing about "exotic loans," "teaser rates," and "mortgage meltdown." Ugh.

Perhaps I was unaware because my credit union shielded me from such nonsense--that's the word on the street, anyway. That's thestreet.com, which says "Credit Unions Give Banks a Run for Their Money." To quote:

"Credit unions are somewhat of a financial services safe haven in today's volatile consumer loan market. They avoided much of the sub-prime debacle by not offering the types of exotic loans and teaser rates that were widely available at the time."

Is that conclusion any surprise? Shouldn't be--since credit unions are ultimately only responsible to their owners, who collectively (and cooperatively) own the place.

TheStreet.com also pointedly notes that's in opposition to banks--which are responsible only to their shareholders.

TheStreet.com, in the posting titled "Credit Unions Give Banks a Run for Their Money," also points out how many credit unions are developing "innovative products to attract customers."

Among them: Credit cards, which the posting quotes Linda Sherry of Consumer Action as saying:

"You should be able to expect fairer terms from your credit union because [it] is owned by its membership, not a profit making entity. Not all credit union credit-card contracts contain arbitration clauses, for instance, which leaves members free to settle disputes through the court system, rather in front of someone who works for a private group often chosen by the bank."

Check it on TheStreet.com ...

Motley Fool Says Get a Good Credit Card From a Credit Union

Next to signing up for the military, which makes you eligible for the very best credit card deals, The Motley Fool says go to a credit union to get the best card terms.

It says Consumer Reports asked 36,298 credit card users to talk about the 61,944 cards they stuff into their pockets. Cards from USAA Federal Savings and Navy Fedearl Credit Union ranked the number 1 and 2 best out of 100 cards in the survey. But, hey, you've got to be part of the military to get them. For the rest of us? The Fool says ranked number 3 are the good deals available with all the "plain old 'other credit union cards.'" Click here to see more about this.

Best card deals on campus at credit unions

The Sept. 4 edition of BusinessWeek advises college students to looking for a credit card "to keep walking past the tables loaded with freebies and into the credit union, assuming there is one on campus."

While credit union membership at colleges used to be limited to employees, the requirements for joining are much looser than they used to be. At some schools, such as the University of Southern California, these financial institutions open their doors to students and offer credit cards to students, among the other financial products. Credit unions are much easier to deal with if you have problems, and they are much less likely to jerk you around on interest rates."

Read BusinessWeek's complete story for yourself.

Consumer Reports: Credit unions best for credit cards

The revered consumer watchdog group Consumers Union in its October Consumer Reports publication said credit cards issued by credit unions received the best marks overall in a survey of 36,000 cardholders nationwide. According to the report:

Credit unions are run by members, so they have a vested interest in providing credit at very low rates. And they are more focused on keeping their members happy, while banks have to worry more about keeping their investors happy.

And the press is taking note:
> The best and worst credit cards [CNNMoney]
> Banks get low scores in credit card poll [Contra Costa Times]
> Report: Card deals better at credit union [The Oakland Tribune]