Ask AFSCME
Does the AFSCME Credit Card Still Offer an Advantage?
Does the AFSCME Credit Card Still Offer an Advantage?
It helps members who use credit cards save money and get comparable rates, better terms and unique union-member-only benefits. But changes to the program, and to the credit card industry, have some cardholders wondering if the AFSCME Advantage card still offers benefits.
The hard work of union, consumer, community and civil rights groups led to last year’s passage of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. When the law takes effect this February, terms will be more transparent, and many fees and arbitrary rate hikes will be eliminated.
Several changes created by the new law were already in place for AFSCME members. The AFSCME card doesn’t allow unfair practices like double-cycle billing or price hikes when a payment arrives a day late. These practices will be prohibited through the Credit CARD Act, giving all consumers the same protections AFSCME Advantage cardholders have had for years.
All major credit card issuers have responded to the new law by raising interest rates three to 18 percentage points. Rates that were fixed have become variable. But the average rate increase for union cardholders is two percentage points, with some increasing by five—much less than the industry average.
Union cardholders have a lower rate because Union Privilege, the organization that develops most AFSCME Advantage benefits, is backed by the strength of millions of union members. That power helped us negotiate with the bank that issues the credit card and keep rate increases lower.
For union cardholders, this is the bottom line: The financial benefit of the changes created by the Credit CARD Act outweigh the cost of the increase in rates and other changes. For example, over-limit fees and online payment fees will be eliminated. Payments will be applied to the highest rate balances first and late fees must be reasonable and proportional.
Union power also eliminated penalty-pricing on existing balances. (Other cards continue to charge penalty rates as high as the Prime Rate + 29.99 percent on existing balances.) The strength of union members also ensures the AFSCME Advantage Credit Card will continue to have strict rules limiting when rates can be increased on new transactions.
When it comes to protecting members, the AFSCME Advantage Credit Card leads the way. And Union SAFE benefits make the card even better. Grants are available to help during unemployment; when disaster relief is needed; to help save for college or cover large, un-reimbursed hospital expenses. AFSCME cardholders also have access to free credit and budget counseling, skip payments, a layoff helpline, and a scholarship program.
If you have concerns about a change in the terms of your AFSCME Advantage card, call 800-622-2580. The bank will attempt to accommodate adjustment requests, but a decrease is not guaranteed.
For more on AFSCME Advantage benefits, visit the Members Only page, or call Susan Welsh at 202-429-1079, or 800-588-0374.
Still Fighting
AFSCME, the AFL-CIO and Union Privilege have joined with Americans for Financial Reform to call for the creation of an independent watchdog to oversee financial products for consumers.
The new Consumer Financial Protection Agency would ensure that consumers have the clear, accurate and honest information they need in order to make sound financial decisions.
To become part of the solution and take action now, visit ourfinancialsecurity.org.
