Can You Get a Credit Card from a Credit Union?

Have you been curious concerning whether a credit union credit card would be good fit for your financial options? Credit cards can be issued to people over the age of 18. Seven out of ten people have at least a single credit card. It seems like many big banks offer credit cards too. Which is better, getting a credit card from a larger banking institution or a credit union? At a glance, credit cards from credit unions typically offer lower fees. But what is a credit union and why should you get a credit card from one of them?

A credit union is a member-owned, nonprofit bank with members-only, all-volunteer boards. Big banking institutions typically have higher interest rates and fees and share their profits with shareholders. Credit unions pass their profits to members in the form of low fees and interest rates. Credit unions also serve their communities by offering banking services to people in the same geographical area, who work for one particular employer, or who are members of certain organizations. Luckily, you can easily find a credit union in which you qualify to use their services.

You can get a loan, mortgage loan, business loan, car loan, a checking account, a savings account and much more at a credit union. They are just like big banks in that they offer credit cards for all major networks such as Mastercard and Visa too. No matter the size of the credit union, you can use credit cards issued by them anywhere a certain network is accepted. All credit card payments are reported to credit bureaus so you can build credit too.

Understanding Credit Union Fees

A major perk of using a credit union to get credit cards are the lower fees. While both big banks and credit unions may charge annual fees in comparison only 10% of credit unions charge fees while 45% of traditional banks charge fees. When it comes to late fees if you make a late payment, credit unions charge lower fees while big banks charge on average up to 50% more.

Whether you knew it or not, foreign transaction fees are charged when you use a credit card outside of the United States. A credit union credit card has lower foreign transaction fees at 1.15% than big bank credit cards at 2.97%. Getting a credit card from a credit union is a pretty attractive option if you travel out of the country a lot.

Do you transfer balances a lot? If you desire to transfer a balance from one credit card to another, a credit union card is a great choice. Most bank credit cards charge fees ranging from 3% to 5% whereas credit union cards do not typically charge anything.

Annual Percentage Rates Matter

Per Federal law, credit unions cannot charge more than 18% for interest rates on loans. This also applies to credit cards. The National Credit Union Administration charges interest rates on credit cards at 11.71% while bank credit cards are at 13.13%. That may now seem like a drastic difference, but keep in mind that reward credit cards tend to have variable APRs up to 18% to 21%.

Credit Unions Provide Higher Approval Odds

Even though credit unions check credit scores as well as reports before giving out credit cards and could deny giving you a credit card, more often than not your application could be reconsidered. You are more than just someone walking in off the street. Credit unions give you the chance to explain financial situations and convince them that you deserve their trust.

Ask About Secured Credit Union Cards

If you cannot get a credit card you could always ask about a secured credit union card. A secured card requires that you supply a deposit of their monetary choice, to serve as your credit limit. This can be any amount from $500 dollars or more. Since this type of credit is also given to credit bureaus, it is the perfect way to build credit.

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