In the past four months, credit card companies have tacked on new fees, changed your account terms and raised your interest rates, some even over 30 percent.  Those issuers are looking for ways to raise profits before credit card reform rules go into effect in February.  A new Pew Research study finds what it calls a better alternative: a card from a credit union.

They look the same; they work the same. But cards issued from a credit union are a lot different from those from a bank.

“We design our programs with low interest rates, lower fees, no annual fees and more favorable grace periods,” President of Sioux Empire Federal Credit Union Jeff Jorgensen said.

For example, Sioux Empire Federal Credit Union charges 7 to 11 percent interest on its cards with no annual fee. Late fees are just $12.50; compare that with the standard $30 late fee charged by most major card issuers. And here's a big difference. The interest rate on cash advances is the same as purchases, while banks charge up to 22 percent.

Jorgensen says the facts that credit unions are non-profit and local make all the difference.

"We're not trying to push our credit cards to people who live in California or New York. They're not eligible for membership. The defined geographical area our membership has a common bond.  Because it has a common bond, we can do things a little differently,” Jorgensen said.

Jorgensen says the credit union's risk is lower and by federal law, interest rates can't exceed 18 percent.

"That goes against everything South Dakota has, having no usury laws. That's what attracted credit card issuers to our state. That law doesn't even apply to credit unions,” Jorgensen said.

Jorgensen says the only change the credit card act forced upon his credit union was to push the payment due date back by a few days.

"The credit card act caused us no grief at all. For us, it's about time. All these people should be doing these things already because it's pro-consumer,” Jorgensen said.

And what do banks have to say about the difference between their cards and those of credit unions?  Banks say credit unions have an unfair advantage because while they pay federal income taxes, credit unions are exempt.

If you'd like to learn more about the battle between banks and credit unions, read this Federal Reserve article.