If you are in the market for a new credit card, you may be wondering if you should consider a card from your credit union instead of a bank. If you are already a member of a credit union, it certainly may be worthwhile to see what your credit union can offer you.
Here are some of the most typical advantages and disadvantages to consider before applying for a credit union credit card.
Advantages Of Credit Union Credit Cards
- Lower Interest Rates: One of the best advantages you will likely receive with a credit union card is a lower than average interest rate. While the rate you get will depend on your credit, it could be significantly lower than what major credit card companies are currently offering.
- No Balance Transfer Fee: If you are looking for a balance transfer credit card and want to avoid fees, a credit union card may be a decent option. While most major banks charge a balance transfer fee, credit union cards may be available without fees. However, credit unions do tend to offer shorter 0% interest periods – if a 0% rate is even available – so if you want a long 0% balance transfer that lasts close to two years, your best bet is likely to look online.
- Easier Approval: Credit unions will very often look beyond just your credit history and score when it comes to approval criteria. If you can show you have the ability to pay and are working towards stable finances you may get approved through a credit union, where a bank would turn you down. It is important to note that along with an approval may come additional requirements, like attending a budgeting or finance workshop.
- Willing To Work With You: Credit Unions are also more likely to work with you if you find you are in over your head when it comes to making your payments. Bottom line, they are easier when it comes to forgiveness. Many will work with you on a payment plan and help you when it comes to budgeting.
Disadvantages of Credit Union Credit Cards
- For Members Only: In order to qualify for a credit union credit card, you will need to become a member, which is not always convenient. Plus, as a new member, you may not be able to qualify for the best rates on credit cards, especially if you don’t have the best credit.
- Less Than Stellar Rewards Programs: If you are looking for a great credit card rewards program, you more than likely will not find one at a credit union. While some credit unions do offer rewards cards, the major credit card companies have a huge advantage here.
- Account Management: The major credit card companies have really great online account management tools. Chase Slate, for example, comes with Blueprint, a feature that lets you manage everything from budgeting to how much interest you pay. Credit unions really can’t compete on this front.
Overall, credit union credit cards can be very beneficial, particularly for people who carry small balances from month to month or those with average or below average credit, as a credit union may be able to offer better rates and terms. However, if 0% promotions, rewards, and easy to use online account management tools are important to you, sticking with a major bank may be a better option.
This post was featured in the Integrated Finance Carnival. Other recent posts from Smart Balance Transfers were featured in the Totally Money Carnival at Money Beagle and in the Carnival of Financial Planning at Control Your Cash.