Credit union credit cards (2019 guide): How they work, best cards
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Find low fees and interest rates — and in some cases, powerful rewards.
Credit union credit cards are issued by member-owned financial institutions. That can be great news, as nonprofit credit unions help their members save through lower fees and interest rates.
Credit unions can pack a punch too, offering rewards cards that give big banks a run for their money.
Our pick for a credit union card
PenFed Platinum Rewards Visa Signature® Card
0% APR promo balance transfer rate for 12 months now through September 30, 2019. After that, the APR for the unpaid balance and any new balance transfers will be 11.99% to 17.99%. APR will vary w/the market based on prime rate. 3% balance transfer fee per transaction. Subject to credit approval. $100 bonus after spending $1,500 in purchase transactions within the first 90 days of account opening.
Rate and offers current as of June 1, 2019 and subject to change.
Earn 5 points on gas purchases at the pump. Fuel purchases for airplanes and boats do not receive cash back rewards.
These cards are issued by credit unions instead of banks. They also tend to have lower fees and interest rates than you’ll find at larger financial institutions.
To get a credit union credit card, you need to become a member of the credit union, which usually involves a fee of around $5 to $25. You may also need to open a savings account before or during your application.
What is a credit union?
A credit union is a financial institution that’s owned by its members. It’s a nonprofit, serving its members rather than seeking to generate profit for shareholders. This is why you’ll often find higher savings when using a credit union.
Once you’re a member, you’ll 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.
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
Community. As well as being focused on benefitting members, credit unions usually have a community focus. For example, they may provide funding for local groups and schools, and encourage arts and performance to strengthen bonds.
Limited membership. Some credit unions also limit membership to people in specific industries. For example, Teachers Mutual Bank primarily offers membership to retired and current teachers, university students studying to become teachers and other employees in the education sector.
Banking differently. As a result of these credit union features, people often pay as much attention to a credit union’s philosophy as they do to specific products and features. This level of involvement means credit unions often suit people who want to completely change the way they bank.
This card isn’t just the best travel option among credit unions; it’s one of the best travel cards, period. You’ll earn strong rewards on travel and generous rewards on all other purchases. You’ll also find an annual air travel credit and a credit for your Global Entry/TSA PreCheck application fee — rarities among no-annual-fee cards.
Annual fee: None.
Welcome offer: 25,000 bonus points after you spend $2,500 on purchases within the first 90 days of account opening.
This bonus is worth $250.
3x points on travel purchases.
This is bumped up to 4x points on travel purchases if you’re a PenFed Honors Advantage Member. To become one, open a free PenFed Access America Checking Account.
1.5x points on all other purchases.
A very generous base rewards rate, considering there’s already a bonus rate on travel. Many flat-rate-rewards cards offer a 1.5% rewards rate on all purchases.
Promo APR: 0% on balance transfers for 12 months.
After this promo APR expires, the balance transfer APR will be 12.99% to 17.99% variable.
$100 annual air travel credit.
This is a key feature that makes this card stand out. You’ll rarely find this benefit with a no-annual-fee card.
Global Entry/TSA PreCheck application fee credit.
Every five years, you’ll receive a credit for your Global Entry or TSA PreCheck application fee.
This card offers the best flat-rate cash back on the market: 3% during your first card year and 2.5% during your second card year. Because it has an annual fee, it’s the best choice only if you have a high volume of spending.
Annual fee: Waived the first card year.
Starting the second year, the annual fee is $99.
3% cash back on all purchases in the first card year.
Starting the second card year, you’ll earn 2.5% cash back on all purchases. Both of these rates are the best flat-rate cash back you’ll find on the market.
While the bank-issued Citi® Double Cash Card is usually the top choice for flat-rate cash back, PenFed’s card is very competitive. It offers 1.5% cash back on all purchases. And if you become a PenFed Honors Advantage member — which you can do by opening a free PenFed Access America Checking Account — you’ll earn a top-notch 2% total cash back on all purchases.Crucially, the PenFed Power Cash Rewards Visa Signature® Card has no annual fee, so you can keep all the cash back you earn.
Annual fee: None.
Signup bonus: $100 statement credit after you spend $1,500 on purchases in the first 90 days of account opening.
1.5% cash back on all purchases.
You’ll earn 2% total cash back on all purchases if you’re a PenFed Honors Advantage Member. You can become one by opening a free PenFed Access America Checking Account.
Promo APR: 0% on balance transfers for 12 months.
After this APR expires, your ongoing APR will be 11.99% to 17.99% variable.
PenFed’s excellent product offers the highest rewards on gas you can get from a general-rewards card. In this space, the credit union comes out on top over the big banks.
Annual fee: None.
Signup bonus: $100 statement credit when you spend $1,500 on purchases in the first 90 days.
5x points on gas at the pump; 3x points on groceries.
These are excellent rewards rates for everyday purchases. Earn 1x points on all other purchases.
Promo APR: 0% on balance transfers for 12 months.
After this promo APR expires, the ongoing APR will be 11.99% to 17.99% variable.
Best for low interest (variable): Lake Michigan Credit Union Prime Platinum Visa Credit Card
If you have excellent credit and want to carry a balance on your credit card, this product might be a strong choice. You could receive an APR on all balances as low as 8.5% variable. This is an impressive rate, as the average credit card APR is around 17%.
Annual fee: None.
Ongoing APR: As low as 8.5% variable.
With excellent credit, you could score a very low APR on purchases and other balances.
Best for low interest (fixed): Cencap Federal Credit Union Visa credit card
If you want more certainty with your interest rate, consider this card. You’ll receive a fixed 9.9% APR on purchases and balance transfers — an excellent deal.
Annual fee: None.
Ongoing APR: 9.9% fixed.
If you want to know for sure which APR you’ll get on purchases and balance transfers, Cencap Federal Credit Union Visa credit card‘s card is a great choice. This is a low APR compared to the average credit card APR of around 17%.
Rewards are uncommon among secured credit cards, and that’s why the SDFCU Savings Secured Visa Platinum Card stands out. You’ll earn 1x Flexpoints on all purchases, which you can later redeem for travel, events, merchandise, gift cards, charitable donations and more.You’ll also enjoy a relatively low APR on all balances. While it’s always a good idea to pay your balance in full each month, a lower interest rate can be helpful in a pinch.
Annual fee: None.
Flexpoints: Earn 1x points on all purchases.
Rarely will you find a secured card with rewards. Earning 1x points isn’t spectacular, but it’s better than you’ll get with most secured cards.
Ongoing APR: 14.24% variable on all balances.
This is a relatively low APR, even though it’s highly recommended to pay off your balance in full each month.
How we chose our best cards
We gave heavy weight to cards with the best rewards rates in their categories. When contenders were relatively even, we chose cards with additional standout features — benefits one usually wouldn’t expect in similar products.
How to compare credit union credit cards
Include the following factors in your comparison to find the right credit union for you:
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.
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 typical credit cards.
Grace period. 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. You’ll still find a few options that offer points for purchases made on your account, though.
Other fees. The most common fees include international transaction charges, late payment fees and cash advance fees.
Branch access. Credit unions may have a more limited branch network when compared to larger financial institutions.
What’s right for me? Credit unions or banks?
Credit union
Banks
Focus
Provide better member experiences and improve their financial situation with quality products and suitable advice.
Maximize profits for their shareholders, so they can attract more investors.
Profit
Goes back into the system to provide its members with competitive rates and offerings.
Goes to its shareholders. The bank might invest some of it in different kinds of financial products.
Security
Credit unions offer Mastercard and Visa credit cards, both of which provide secure payment systems and protection against fraudulent electronic transactions.
Banks offer the same security measures.
Rewards
Credit unions provide credit cards linked to a limited amount of major rewards programs.
Banks offer a range of rewards credit cards as well.
Other benefits
You have a say on how the credit union is run as a member.
Banks also offer added features through their credit cards, but you might have to pay higher annual fees in this case.
Bottom line
Now that you know more about the different structure and focus of credit unions, you can compare these cards with the larger financial institutions to find one that suits all of your needs.
This depends on the credit union you wish to deal with You can find a number of credit unions that accept online applications for credit cards.
The eligibility criteria for credit cards can vary, but generally includes the following:
At least 18 years old
A permanent US citizen
Have a good credit history
Meet the membership requirements of the credit union
For specific information on application requirements, refer to the product page of any credit union credit card you’re interested in. You may also want to visit a specific credit union’s website for more details.
Most credit unions have small branch networks in comparison to banks. But some may allow you to bank in partner branches, or offer other services. Refer to individual credit union websites for details of their branch networks and access options.
Yes. Credit unions are accountable under the same regulations and laws as banks in the US.
Kevin Joey Chen is a credit cards writer at finder.com. He's passionate about helping you get your finances in order and travel the world like a pro. He's taken an extended trip around Europe as a digital nomad, gaining firsthand experience with exchange rates, ideal (and not-so-ideal) credit and debit cards, foreign transactions and budgeting strategies. He earned his BA from UC Davis and has written across many niches at Finder, including cryptocurrency, personal loans, car insurance, real estate and money transfers.
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Include the following factors in your comparison to find the right credit union for you: