WASHINGTON–Credit unions “lag” banks when it comes to overall website transparency around how credit cards work, according to an analysis released by one company.
CardHub said it conducted an analysis of the online credit card listings by 10 large banks and 10 of the “most popular” credit unions and said it found the credit unions’ offers were not as clear as those of banks’. The chief deficiency hurting credit unions, according to CardHub, was “how rewards earning and redemption rates are characterized.”
“How easy is it to find the right credit card online?” said CardHub in introducing its analysis. “While comparison tools and customer reviews simplify the selection process in many respects, marketing obfuscation and inconsistency on the part of issuers makes it difficult for consumers to accurately discern each offer’s net value proposition, and thus which card will best suit their needs.”
CardHub said it scored online card offers according to the following criteria:
- Rewards: Do the issuer’s product pages clearly define — without reading the fine print — how to earn rewards and how much they are worth (e.g., Are 50,000 miles worth a trip to Chicago or Greece)?
- Annual fee: Is the annual fee clearly displayed, beyond pricing disclosures or fine print?
- Costs of purchase financing: Are the introductory and regular APRs for new purchases clear to the consumer without having to reference pricing disclosures, fine print, or a separate page?
- Balance transfer costs: Are all relevant balance transfer terms – introductory and regular APRs and balance transfer fee – clear without referring to pricing disclosures, fine print, or a different page?
CardHub said that Capital One, State Employees Credit Union (North Carolina), and Boeing Employees Credit Union have the clearest overall credit card applications. It is the sixth consecutive year that Capital One has topped the bank category. The company said it found that Barclaycard US (given an overall score of 85.74%) and Navy Federal Credit Union (given an overall score of 84.73%) have the least clear credit card applications.
CardHub gave its “most improved” award to USAA, whose online credit card listings improved 16.09 percentage points relative to 2014 in the CardHub rankings. American Express earned the biggest improvement in its score relative to 2013, with a rise of 10.60%. US Bank also experienced a significant increase of 8.89% points.
In relative ranking, Chase and USAA fell furthest, dropping two positions from their 2013 ranks, CardHub said.
“The areas in which the most ambiguity remains – for big banks and credit unions alike – are the same as in previous years: the disclosure of balance transfer fees and rewards redemption value,” said CardHub. “Nevertheless, transparency is now at the highest point since we began conducting this study in 2010 – having increased 15% in that time.”
The credit unions in the study included State Employees CU, BECU, Pentagon FCU, SchoolsFirst FCU, Alliant CU, Golden 1, Star One, Security Service, San Diego County and Navy Federal.