Credit union credit cards (2019 guide): How they work, best cards

Find low fees and interest rates — and in some cases, powerful rewards.

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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.

What are credit union credit cards?

These cards are issued by credit unions instead of banks. They tend to have lower fees and interest rates than cards issued by 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.

Can you apply for a credit union credit card without being a member?

Typically, you can apply for a credit union credit card even if you’re not a member. If you’re approved, however, you’ll need to become a member.

You’ll find different eligibility criteria for membership in credit unions. For example, you may need to work under a certain employer, live in a certain area, be a family member of a current member or have a certain occupation. Some credit unions let anyone become a member as long as they join certain nonprofit organizations.

To join a credit union, you may need to pay a small fee of $10 or less.

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.

Why join a credit union?

Besides benefits such as lower interest rates, consumers often flock to credit unions for additional reasons, including:

  • 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.
  • Special rewards.
    Credit unions may bump up credit card rewards exclusively for members and those with certain accounts. With the PenFed Pathfinder Rewards American Express® Card, for example, you’ll earn 4x points on travel purchases if you’re a PenFed Honors Advantage member. Most other cardholders earn 3x points on travel.

The best credit union credit cards of 2019

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Best for travel: PenFed Pathfinder Rewards American Express® Card

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 $100 annual air travel credit and a $100 credit for your Global Entry/TSA PreCheck application fee — rarities among no-annual-fee cards.

Best for cash back (high spending): Alliant Cashback Visa® Signature Credit Card

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.

Best for cash back (low to moderate spending): PenFed Power Cash Rewards Visa Signature® Card

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.

Best for gas and groceries: PenFed Platinum Rewards Visa Signature® Card

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.

Best for low interest (variable): Lake Michigan Credit Union Prime Platinum Visa Credit Card

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 7.75% variable. This is an impressive rate, as the average credit card APR is around 17%.

Best for low interest (fixed): Cencap Federal Credit Union Visa credit card

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.

Best for rebuilding credit: SDFCU Savings Secured Visa Platinum Card

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.

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.

Compare credit union credit cards

Updated November 17th, 2019
Name Product Filter values Rewards Purchase APR Annual fee
1x points on all purchases
11.74% to 18% variable
$0
Earn 10,000 points after spending $2,000 on purchases in the first 60 days from account opening.
3% cash back on the first $6,000 annually at gas stations, then 1%, 2% at supermarkets and 1% back on all other purchases
0% intro for the first 6 billing cycles (then 13.49% to 17.99% variable)
$0
Earn 3% cash back on the first $6,000 in eligible net purchases made each year at gas stations 2% cash back on supermarket net purchases and 1% cash back on other everyday net purchases.
N/A
13.5% variable
$0
A great way to establish or improve your credit history.
1x points on all purchases
18% variable
$0
Earn 1x points on all purchases while building credit.
13.74% variable
$0

Compare up to 4 providers

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.
  • Annual fees.
    Most credit union credit cards have low annual fees. There are also some credit union credit cards that don’t charge an annual fee.
  • 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.
  • Complimentary extras.
    In general, only gold or platinum credit union credit cards will offer complimentary extras such as travel insurance or concierge services.
  • 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 unionBanks
FocusProvide 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.
ProfitGoes 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.
SecurityCredit 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.
RewardsCredit unions provide credit cards linked to a limited amount of major rewards programs.Banks offer a range of rewards credit cards as well.
Other benefitsYou 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.

For more options, check out our guide to the best credit cards of 2019.

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