Ask someone from a military family where his credit card is from, and 9 times out of 10 you'll probably get the same answer: USAA.
The United Services Automobile Association was formed in 1922 to provide auto insurance for Army officers. USAA still insures cars for members of the military and their families but is perhaps better known these days for other personal finance products. These include credit cards that charge 9 percent interest rates on balances carried over from one month to the next.
Because USAA members' adult children are also eligible for membership in the organization, it's not just active and former service people who can acquire cards with its interest rates, which are half or less what many other issuers charge.
"USAA is the only large membership organization that offers its members really low card rates," says Ben Woolsey, head of consumer research at CreditCards.com. "Most other big membership or affinity groups, including AARP, AAA and the like, have partnered with major issuers, such as JP Morgan Chase, and don't offer their members low rates. Even wholesale clubs that require membership, like Costco and BJ's, have partnered with major card issuers and don't offer particularly attractive rates."
The good news: USAA isn't the only place where low rates are hiding.
We've long suggested that readers explore the financial benefits of credit unions. There are eligibility rules for these organizations as well, but chances are there's at least one credit union you'll be eligible to join. Ever volunteered for the American Red Cross? That qualifies you for membership in the Pentagon Federal Credit Union, which offers a Visa card with a 10 percent rate (following a 36-month introductory period that features a 7.5 percent rate.)
Credit unions have become increasingly attractive as consumers tire of the high rates and various fees charged on plastic issued by big commercial banks. But don't assume there aren't any low rates to be found among the nation's banks. Some Main Street financial institutions are bastions of consumer-friendly terms.
Simmons First National, which operates eight community banks in Arkansas, and Louisiana's IberiaBank both offer Visa cards with 7.25 percent rates to low-risk customers. Iberia requires those receiving that rate to have been with their current employer for at least six months. UMB Financial, a Kansas City outfit that offers insurance, investment management and a variety of banking services, issues Visa cards with 10 percent rates.
"Smaller and regional banks and credit unions manage their credit card underwriting more prudently and aren't under such intense pressure [as the major issuers are] to grow new accounts and balances outstanding," Woolsey says.
© 2012 Forbes.com