Credit Union Credit Cards vs. Bank Credit Cards

Posted by Excite Credit Union on Feb 1, 2022 11:00:00 AM

a woman chooses a credit union credit card vs. a bank credit card for making purchases during a shopping trip

Belonging to your local credit union means you're more than just a number. It's like you become a member of a special club with a host of perks and benefits – including great offers on credit cards. 

When comparing credit union credit cards vs. bank credit cards, you may get lower rates through your credit union, and you might be able to qualify with a lower credit score than usual. Read on to find out all you need to know about credit union credit cards.

Personalized Service

Credit unions treat their members like neighbors in a trusted community. Generally speaking, you need to live, work, or worship in a certain place to be able to join. So, chances are, you're literally neighbors with some of the other members!

Here's how being a credit union member can improve your credit card experience:

  • You can get to know the names and faces of your local member service representatives, and they can get to know you and your story.
  • If your credit isn't so great at the moment, they might take a look at all the other good things about you and still offer you a card, whether secured or unsecured.
  • Meanwhile, a bank might have simply run the numbers and denied you with no further explanation or ideas about a different path forward.

Lower Rates

Shop around a few credit cards from different places and you might start to notice something: Credit unions often offer lower rates than your average big bank. But how do they do it?

Here's how credit unions can give you lower rates:

  • Credit unions are a kind of not-for-profit organization, whereas banks are for-profit companies.
  • Like banks, credit unions get revenue from fees and interest on credit cards and loans.
  • Unlike banks, that revenue gets distributed back to you in the form of lower interest on credit cards and loans, fewer fees, and generous rates on savings.    
  • Plus, there's an 18% cap on the interest rates of federally chartered credit union credit cards, and that cap is lower than many bank credit card rates! 

No or Low Fees

Take a look at the fees table for credit union credit cards vs. bank credit cards and you might notice your local credit union comes out in front again.

Here are two key differences in fees you might see:

  • Annual fee: Credit unions may offer more cards with no annual fee compared to banks. 
  • Late payment fee: Credit unions may charge less for their late payment fees than banks.
  • Balance Transfer Fee: Credit unions may offer you a generous introductory rate on a credit card balance transfer with no upfront fee, while banks often take a percentage. 

Complimentary Insurances

A credit union is like a one-stop-shop to make your life easier with less stress. Your credit union credit card could be your ticket to affordable insurance, so you can relax even if the worst happens.

Types of insurance that might come with your credit union credit card:

  • Travel accident
  • Auto rental
  • Roadside dispatch

Credit Card Rewards

Even with all these built-in advantages, your credit union credit card can still compete with the banks when it comes to rewards programs.

Your credit card may offer you the chance to:

  • Get 1% cashback for each transaction
  • Earn points you can redeem for travel services
  • Earn bonus points if you reach certain goals

Credit Union Member Perks

Now that we've covered all the ways credit union credit cards might win against the banks, it's time to dig deeper into why being a member is so good for you and your family.

Perks of credit union membership may include:

Next Steps: Choosing the Right Credit Card for You

So you see, it's a no-brainer. Joining a credit union and getting a credit union credit card is a win-win situation. At a credit union, you're a valued member of the community, not just a cog in the profit machine. 

No matter if you're already a member or are thinking about joining, a friendly member services representative will be happy to get to know you and point you in the direction of the right credit card for your needs.