For some consumers, a no-frills credit card is the best choice for achieving financial stability  

Media Contact: Barbara Fornasiero; EAFocus Communications; barbara@eafocus.com; 248.260.8466

Wyandotte, Mich. —September 14, 2026 – As a designated low-income credit union, Michigan Legacy Credit Union (MLCU) is always on the lookout for credit options that meet the needs of its more than 22,250 members. When it comes to credit cards, MLCU President and CEO Carma Peters notes that credit cards that offer rewards programs are not always the best choice for consumers who live on a tight budget.

“It seems counterintuitive that a credit card that gives no rewards is often the best option for those unable to pay off their credit card balance each month,” Peters said. “But ‘free’ perks like gas, hotel rooms, air travel and even cash back can be costly for those who carry a balance. The rewards are quickly negated by higher interest rates and the fee to purchase the rewards credit card in the first place.”

Peters explains that the interest rates are the equivalent of “the devil is in the details” expression, and that securing a new credit card should include reading an understanding the fine print. A credit card with a high interest rate will almost immediately wipe out the value of any benefits to those who carry a balance, even if only for a few months.

“Store credit cards can carry interest rates of 32% and higher, while big bank credit cards offering rewards can go as high as 30%. When a credit card balance of $1,000 requires a minimum payment of $100, for example, the balance carried forward, minus the payment and with a 24% annual percentage rate (APR), would be $918.00 in the second month. Paying $100 on the second month’s balance decreases the balance to $834.36. So, while the card holder paid $200 total toward the balance, $34.36 disappeared due to the 24% interest rate. Basically, $200 was only worth $165.64.  Even if a store gives 20% off the first purchase as a reward, the balance quickly balloons as the months move forward.

U.S. credit unions have an 18% interest rate cap for consumer loans, including credit cards, set by the National Credit Union Administration (NCUA). U.S. retail banks do not have a federal maximum interest rate, and credit card interest rates typically range from 16% to 30%.

“Credit unions definitely have he advantage over retail banks when it comes to low interest rate credit cards,” Peters said. “Michigan Legacy Credit Union’s standard credit card interest rates are 9.99%, 11.99% and 13.99%, depending on credit scores and the amount of credit made available. While we do not offer credit card rewards, we offer cards with no annual fee for non-reward shoppers. Plus, the credit union does not have gouge members to make credit cards profitable.”

Who benefits from zero-reward credit cards? Consumers who:

1. Live paycheck to paycheck
2. Carry a balance on their credit card, regardless of income
3. Often do not use any or all of the rewards offered through a credit card.
4. Those who have credit cards perks that don’t match their lifestyle; for example, consumers who rarely travel, don’t eat out regularly, or don’t shop much beyond purchasing life’s necessities.
5. Have had a lifestyle change (unemployment, divorce, etc., and have been forced to change their spending habits.

“Credit cards play an instrumental role in achieving – or failing to achieve – financial security. The type of card selected and how it is used should be reviewed regularly. As people’s lives change, their credit card usage often does, too,” Peters said.

About Michigan Legacy Credit Union

Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.