The single most striking finding in the CFPB’s Terms of Credit Card Plans survey is the size of the gap between large and small issuers. Large banks charge roughly 8 to 10 percentage points more in purchase APR than small banks and credit unions — for borrowers in the same credit tier.
The numbers by credit tier
Median purchase APR reported to the CFPB, by issuer size and credit tier:
| Credit tier | Large issuers (top 25) | Small banks & credit unions | Gap |
|---|---|---|---|
| Great credit (720+) | 22.99% | 15.24% | ~7.8 pts |
| Good credit (620-719) | 28.20% | 18.15% | ~10.1 pts |
| Poor credit (619 or less) | 28.49% | 20.62% | ~7.9 pts |
A borrower with good credit pays a median 28.20% at a large bank versus 18.15% at a small bank or credit union — the same person, a 10-point difference.
Why credit unions come out ahead
Federal credit unions are capped at an 18% APR by law (the Federal Credit Union Act). As member-owned non-profits, many price below even that. On our lowest-APR ranking, credit unions fill nearly every spot, while the highest-APR ranking is dominated by store-card issuers near 30-36%.
What the gap costs you
The CFPB estimated about $400-$500 a year in extra interest on an average $5,000 balance by using a large issuer instead of a small bank or credit union. Plug your own balance into the payoff calculator to see the difference at two different APRs.
The practical takeaway: before applying for a big-bank card, check a local credit union you’re eligible to join. Compare issuer types on our credit-union hub and top-25 issuer hub.
Sources
CFPB Terms of Credit Card Plans survey and the CFPB analysis “Credit card data: small issuers offer lower rates.” Surveyed terms, not offers.