Home > 2011 > Credit Cards

3 Things to Know About Credit Cards from Credit Unions

Advertiser Disclosure Comments 4 Comments

Bank of America’s misstep with debit card fees has brought a lot of attention to credit unions. Even though Bank of America is “taking back” the fee in response to the outcry from the public, Bank Transfer Day is still set to happen on Saturday, November 5.

Even if you don’t switch banks, you can still consider taking a look at credit cards offered by credit unions. In most cases you’ll need to have good-to-excellent credit, but if you’re turned down, call and ask if they’ll look at your application again. Credit unions have been known to take unusual circumstances into consideration.

[Related article: Not Your Grandmother’s Credit Union]

Here are a few things you need to know about credit union credit cards:

#1: You have to become a member

This isn’t always easy because some credit unions serve only a select group. You can join the Pentagon Federal Credit Union with a one-time $20 donation. But you can’t join Navy Federal unless you’re associated with the military.

But there are many others out there that do allow a broader membership so you just have to do some research. You can start your search at A Smarter Choice, which is associated with Credit Union National Association. You can search by location or even do an advanced search by occupation, school and more.

[Resource: Get your free Credit Report Card]

#2: You usually get lower interest rates

Credit unions are non-profit organizations that are owned by the members. According to the Credit Union National Association, federally chartered credit unions have an interest rate cap of 18 percent on all loans, including credit cards. This fact helps to keep rates low.

But the rates are also low because you’re not just a customer, you’re an investor. So many credit unions funnel their profits back to you. This results in savings on various financial products.

If you revolve a balance, a credit union credit card is a good choice because you’ll save money on interest expense.

[Featured Product: Looking for credit cards for good credit?]

#3: You still have to read the fine print

Don’t assume that since it’s a credit union, you don’t need to worry about protecting yourself. You still need to read the disclosure statements carefully. Shop around and compare the terms to a similar card at a regular bank. When it comes to credit products, it’s always buyer beware.

Kristen Christian, who started the Bank Transfer Day movement, will be a guest on The Credit Line radio show hosted by Credit.com chairman and co-founder, Adam Levin, this Saturday Nov. 5 at Noon ET/9 a.m. PT, streaming live on Los Angeles’ KFWB 980 AM.

Image: Indiana Public Media, via Flickr.com

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Megan

    Thank you for the article! I wish I could find a site comparing my local credit unions. This financial speak is hard!

    • Beverly Blair Harzog

      Megan–You’re so right that financial speak is hard! Click on the “A Smarter Choice” link in my blog. You can type in your area and find credit unions within a certain distance. Or try doing a Google search on credit unions in your area. Also check with friends and see if any of them have a credit union they’re happy with.

  • http://besttravelcreditcard.us/ Ron

    Another good tip is to look online first to see what sort of rewards cards you can apply for online. If you look at some of the returns on cash back or rewards cards it may make more sense to get a good cash back card than a lower interest rate [but no reward] card.

    • Beverly Blair Harzog

      Ron-Good tip! If you don’t carry a balance, you can truly take advantage of reward cards and come out ahead financially.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team