Compare the Best Credit Union Credit Cards

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What Is a Credit Union?

Credit unions are community banks and financial institutions. These community banks are entirely member-owned and operated and are designed to serve the best interests of those members. Credit unions, like traditional banks, offer a wide variety of financial products and services, including savings accounts, checking accounts, mortgages, car loans, and credit cards.

How Do Credit Unions Differ from Traditional Banks?

While credit unions offer many of the same financial products and services of traditional banks, they differ in some key respects.

As previously mentioned, the members of the union own each credit union. This unique ownership structure means that credit unions are designed to benefit members over stockholders. Credit unions are non-profit organizations, meaning when a credit union prospers, so do the members. If, for example, a union sees an unexpected influx of fresh capital in a calendar year, the members of the credit unions – including credit card holders – would likely see a drop in interest rates and fees – another advantage of credit unions over traditional banks.

What Benefits do Credit Union Credit Cards Offer?

Credit unions are smaller entities that only accept credit card applications from members – they are also member-owned and operated. Because of their smaller size, and their member-oriented nature, credit unions can typically give credit card applicants much lower interest rates than major credit card issuers and lenders.

Low APR

Typically, many low APR credit cards from credit unions are several points lower on average than a comparable low APR card from a larger lender. Good examples of these types of card include the First Tech® Federal Credit Union Platinum Mastercard®, the Jovia Visa Advantage, and the SDCCU Visa Platinum.

The same is also often true for 0% intro APR cards and even cashback rewards cards. Credit union cards also usually offer reduced fees for balance transfers, cash advances, late payments, and other nominal charges, making them a better option for many if they plan to make a late payment.

These low rates make credit union cards ideal for carrying a balance. Many cards also feature a low – or no – balance transfer fee. This combination of no fees and a low ongoing APR make credit unions particularly appealing to many consumers.

One of the reasons that credit union credit cards offer better interest rates than credit cards from major lenders is that federal law mandates they have lower rates. According to federal law, federal credit unions cannot have interest rates for loans above 15%, though, in reality, the National Credit Union Administration Board (NCUAB) has permission to raise rates if needed – currently capped at 18%. While loans are not the same as credit lines, they play an essential role in shaping how interest rates are calculated under federal law.

18% APR for purchases, balance transfers, and cash advances is, therefore, the highest end of the spectrum for credit union credit cards, meaning they offer significant value to those who don’t have perfect credit but still want an exceptional interest rate. In comparison, the average APR for a similarly marketed credit product from a major lender will likely have an interest rate at – or above – 20% for those with less than perfect credit.

No Annual Fee or Transaction Fees

Credit unions are also far less likely to charge an annual fee versus a traditional bank. According to the NCUAB, only about one in ten credit unions charge an annual fee for their credit cards, compared to nearly half of all other credit card issuers.

One final area where credit unions excel versus traditional banks is the sheer number of available ATMs across the United States. As credit unions are cooperatives, they work together with other unions to create a seamless experience for their members across the country. As a result, there are currently over 28,000 ATMs nationwide available for those who are members of a credit union.

What Are the Drawbacks of a Credit Union Credit Card?

Credit union cards offer significant value to many credit card consumers – especially when it comes to securing a great interest rate. Unfortunately, however, there are some drawbacks with credit union cards as well. These drawbacks are most closely associated with the low-interest rates these community banks offer.

Fewer Options for People with Bad Credit

Credit unions tend to offer fewer credit products than larger banks, making it much more difficult for those with less than perfect credit to get accepted for a credit card. Because of the low APR rates and relatively small cash reserves of credit unions, they are more likely to expect an applicant to have excellent credit or at least good to very good credit.

Before you take the time to apply for a credit union credit card, be sure to check your credit score to ensure you meet the credit needed requirements – merely being a member isn’t enough.

While the options for credit card products are limited to credit unions, there are still credit card options for people with bad credit. Some credit unions, such as Golden 1 in Northern California, offer very good secured credit cards, like the Golden 1 Platinum Secured Visa Card. Secured cards are an excellent option for those looking to rebuild their credit score or establish a credit history.

Approval Hurdles

One of the most common problems with credit union credit cards that people fail to take account of is that credit unions are member-owned clubs. Because of this fact, credit cards from credit unions are only open to fellow union members. There are a wide variety of credit unions out there, but most are either tied to a single employer or armed service branch, or a specific geographic area.

Before you apply for that dream card, therefore, make sure that the credit union that offers it is open to your membership.

Types of Credit Union Cards

Credit union cards, much like traditional lender credit cards, come in all shapes and sizes.  There are credit union cards to suit every need, including those who travel, students, and even businesses.

• Credit Union Rewards Cards – Rewards credit cards offer perks for making purchases with the card. Rewards may be for everyday items, such as groceries or gas, or for purchases made with leading retailers worldwide.
• Credit Union Travel Rewards Cards – Like a rewards card, a travel rewards credit card offers perks and earning rewards for the frequent world explorer. Travel rewards can include airline miles and perks, hotel points and perks, or all-around travel savings when using the card. Unlike larger lenders, credit union travel rewards cards aren’t typically co-branded, meaning they won’t offer rewards for one particular airline or alliance, but rather miles that can be applied to a variety of programs.
• Credit Union Cash Back Cards – As with other lenders, cashback rewards cards from credit unions are a great way to get money back for regularly using your credit card to make purchases.
• Credit Union Student Cards – Student credit cards are a great way for students to build their credit history while still in school.
• Credit Union Secured Credit Cards – Like student cards, secured credit cards are a great way to rebuild credit or establish a credit score. Secured credit cards require a deposit, which acts as the credit limit.
• Credit Union Business Cards – As they are as much a part of the local community as many local businesses, business credit cards from a credit union are the perfect choice for small to medium sized companies. Credit union cards offer businesses the flexibility ad financial resources they need to succeed, along with the understanding that comes with a local financial partner.

Browse Credit Cards from the Leading Credit Unions

Looking for the best credit card offers from the leading credit unions in the United States? BestCards has impartial reviews of the top credit union credit card offerings in every category imaginable. Browse the best credit cards from credit unions and choose your perfect match. Ready to get started? Let us help you find your best card today!