Credit union credit cards

Interested in getting a credit union credit card? Find out how these financial institutions differ from banks and learn to compare options here.

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Credit unions provide a range of financial products and services that are similar to banks. While banks are led by shareholders and focus on generating profits through products and services, credit unions are often run by members and focus on providing benefits to all of their members collectively. This focus means the profits made by credit unions are usually passed back onto customers in the form of more competitive products and services.

Our guide covers everything you need to know about credit union credit cards, including how they differ from banks and what you need to know to choose the credit card that’s right for you.

How do credit union credit cards compare to other options?

Credit union credit cards often focus on providing potential savings and ongoing value for members. As a result, the credit cards available from credit unions tend to have lower ongoing interest rates and annual fees than those provided by banks. They may also come with extras such as rewards programs or complimentary travel insurance, alongside some other perks.

In order to get a credit union credit card, you’ll need to become a member of the credit union, which usually involves a small fee, which is often paid monthly or yearly. You will also likely need to open an account before or during your application for a credit union credit card.

Once you’re a member of the credit union, you will also have the opportunity to influence how the credit union is run. For example, you may be able to vote at annual general meetings or provide feedback that influences the features of different products and services.

In comparison, banks and larger financial institutions operate more like conventional businesses. This means they often provide more competitive introductory offers than credit unions. For example, balance transfer credit cards from banks typically provide lower introductory interest rates and longer promotional periods in comparison to those offered by credit union credit cards.

Banks also tend to provide more comprehensive rewards programs and complimentary extras than credit unions. When it comes to applying for a bank credit card, you don’t need to become a member or pay any annual fees, while you may also not need to open an everyday savings or chequing account. However, a bank does not give you a say in how the bank is run or how different products or services work.

So, what’s right for me – a credit union or a bank?

Credit unionBanks
FocusCredit unions focus on providing better member experiences and on improving their financial situation by providing quality products and suitable advice.Banks focus on maximizing profits for their shareholders, so they can attract more investors.
ProfitAny profit that a credit union generates goes back into the system to provide its members competitive rates and offerings.Profit that banks generate goes to its shareholders, and the bank might invest some of it in different kinds of financial products. This works in your favour only if you’re a major stakeholder of the bank you’re banking with.
SecurityCredit unions generally offer either Mastercard and/or Visa credit cards, both of which provide secure payment systems. You get protection against fraudulent electronic transactions with both types of credit cards.Banks offer the same security measures as credit unions.
RewardsCredit unions provide credit cards linked to some of the major rewards programs.Banks offer a range of rewards credit cards as well.
Other benefitsCredit union credit cards sometimes offer extra perks like travel rewards, insurance coverage and more.Banks also offer added features through their credit cards, but you might have to pay higher annual fees.

girls comparing credit cardsHow to compare credit union credit cards

If you’re interested in getting a credit union credit card, you should consider the following factors when comparing different cards:

  • Standard interest rates. Credit union credit cards tend to have lower standard purchase rates than bank options. Some credit union cards also apply the same interest rate to both purchases and cash advances (rather than having a separate and higher cash advance rate).
  • Promotional interest rates. As credit union credit cards typically offer low ongoing interest rates, the promotional rate offers may be more conservative. If you want to get a credit card with a 0% or low introductory interest rate for balance transfers, make sure you compare both credit union and bank options to find one that offers both introductory and ongoing features that will work for you.
  • Balance transfers. Some credit union credit cards don’t offer balance transfers. The cards that do provide this service are less likely to have a 0% interest rate during the introductory period when compared to cards from banks. However, credit union credit cards usually have a lower ongoing interest rate than credit card revert rates. So if you’re unable to repay your balance by the end of the promotional period, make sure you consider whether you’re better off going with a 0% promotion with a higher revert rate or a low ongoing rate.
  • Annual fees. Most credit union credit cards have low annual fees, if any at all (i.e. under $100). Some bank credit cards also have low or $0 annual fees, so you need to weigh up whether the features of the card justify the cost you will pay for it.
  • Interest free days. If you pay your balance in full by the statement due date each month, you could get up to a certain number of interest free days for each statement period. This feature is available with both credit union and bank credit cards.
  • Rewards. Credit unions offer fewer rewards credit cards than banks. There are still a few options that offer points for purchases made on the account, though, including some cards that are linked to frequent flyer programs or cash back cards.
  • Other fees. Like banks, credit unions may apply other fees for a range of credit card transactions and services. The most common include international transaction charges, late payment fees and cash advance fees. Always check the product details for information on the fees that may apply, so you can factor them into your comparison.
  • Membership requirements. You need to sign up as a member before you can apply for a credit union credit card. In some cases, you can request membership when you apply for a credit card but you may have to apply separately and wait for your membership to be approved before you can apply for and receive your credit card.
  • Complimentary extras. In general, only gold or platinum credit union credit cards will offer complimentary extras such as travel insurance or concierge services. Many regular credit cards through banks offer some complimentary extras.
  • Branch access. Credit unions may have a more limited branch network when compared to larger financial institutions. Before you apply for a credit card from a credit union, you should check out the existing branch network and other access options to decide if it will work for you. This is especially true in Canada since credit unions tend to be located in one province only.

Benefits and disadvantages of credit union credit cards

Benefits

  • Competitive ongoing interest rates
  • Lower annual fees
  • Same interest rate for purchases and cash advances
  • Personalized service

Disadvantages

  • You have to meet membership eligibility requirements
  • Limited reward options
  • Limited balance transfer options
  • Less competitive introductory offers

Other factors to consider

As well as being focused on benefitting members, credit unions usually have a community focus. For example, they may provide funding for local community groups and schools, encourage arts and performance and work on building stronger human bonds.

As a result of these unique credit union features, people often pay as much attention to a credit union’s philosophy as they do to its specific products and features. This level of involvement means that credit unions often suit people who want to completely change the way they bank.

Credit unions also try to make sure they only lend money to people who can make repayments, and they have support services in place to help members who are going through a rough patch. When it comes to credit cards specifically, credit union options tend to offer the most value to people who want an ongoing, affordable option.

If you’re looking for a card that offers short-term value, on the other hand, you may find that bigger financial institutions and banks provide you with more options.

Either way, it can be worth comparing credit cards from both credit unions and banks to see which option is most suited to your financial needs. Credit unions offer a wide range of credit cards for members, including low rate, low fee and reward options.

Now that you know more about the different structure and focus of credit unions, you can compare these cards to those of larger financial institutions like banks to find one that suits all of your needs.

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