Industry News

02/12/2011 - A number of credit unions are getting involved in or re-entering the credit card processing market, as many customers are deserting big banks and turning to these financial institutions for their banking needs.

Credit Union Times reports that one of the latest institutions to get involved in the credit card business is the 13,000-member Tucson Old Pueblo Credit Union in Arizona. The union previously had sold off its credit card portfolio, but it will team up with CUSO PSCU Financial Services, which will handle the new portfolio, this time around.

The credit cards available at the institution will allow it to reach out to a number of new customers by increasing its products list.

"Offering a credit card is essential in this marketplace," Tucson Old Pueblo CEO Joseph Mirachi told the news source. "We have new members joining us from large banks and they are specifically looking for consumer-friendly terms that only credit unions offer. In addition, we need to serve our existing members who are looking for low interest rates and low or no fees. Having an attractive credit card portfolio helps us satisfy and grow our membership."

Many credit cards offer a number of incentives for their customers, such as cash back rewards or airline miles. Card issuers are increasing these bonuses for users to entice consumers to take part in the credit process. As delinquency rates decline and consumer confidence rises, credit card companies hope that by offering top rewards, they can bring customers back to the plastic payment method.

While some cards come with great incentives for purchases, they often come with high interest rates. These cards are ideal for people who make big purchases but are able to pay down the balance each month. For consumers who must carry a balance from month to month, the high interest rates don't typically make the rewards worth it.

However, for consumers who must carry a balance over each month, low-interest credit cards are a great option. The top incentive to these payment methods is that they come with interest rates often as low as 7 percent.

According to CBS Money Watch, some of the top low-interest credit cards on the market include the Iberia Bank Visa Classic, Simmons First Visa Platinum and USAA Rate Advantage.