Benefits of Getting a Credit Card Through a Credit Union

Many credit unions allow you to take cash from ATMs across the country without a surcharge.
i Jupiterimages/ Images

Credit unions offer lots of benefits to their members, including credit cards that often cost less in the long run than what traditional banks offer. Before you sign on the dotted line, make sure your credit union is not one of the 10 percent that issue credit cards through a traditional bank. (Instead, confirm the credit card comes from your credit union’s own card program so you get all the advantages.

Lower Interest Rates

According to a study by The Pew Charitable Trust, interest rates on credit cards ranged from 9.99 percent to 17 percent annually at credit unions, as of May 2011. Federal law puts an interest rate cap on credit union loans, so they are not allowed to charge more than 18 percent annually. Traditional banks are not required to follow the cap, though, so they charge between 12.99 percent and 20.99 percent annually on average.

Decreased Fees

Over-the-limit credit card fees add up, but most major credit unions eliminated over-limit fees in 2011, according to Pew. At least 11 percent of traditional bank credit cards still carry the fees, though, making a credit union card a better choice if you go over your limit. Late payment fees cost $25 at most credit unions, while traditional banks still charge up to $35 per late payment. Annual fees are also lower at credit unions that charge them. The median amount of annual fees, according to Pew, was $25 for credit unions and $59 for banks.

Second Chance

If you get turned down for a credit card at a credit union, you can ask management or the credit union’s loan committee to take a second look at your application. Not all credit unions have loan committees, but if your credit union has one, send it a personal letter explaining your situation and why it should approve you. Not only does the committee take a look at your credit history, income and expenses, but members also look at your motivation and interest in obtaining the credit card.

Access to Cash

Your credit union may be part of the CO-OP Network ( If so, you get access to 28,000 ATMs across the United States and Canada, as of publication. There is no fee for using these ATM machines. You may also make deposits at more than 9,000 CO-OP Network ATMS in the U.S. and Canada without incurring additional fees. This makes it easy to deposit your funds when you’re far away from your branch. To find an ATM machine in another city, visit the CO-OP Network’s website. If you have a GPS system on your car, the network offers a downloadable program to help you locate ATM machines while you’re on the road.

the nest