Here are the best credit union credit cards of 2019:
- No Annual Fee: PenFed Promise Visa® Card
- Gas and Groceries: PenFed Platinum Rewards Visa Signature® Card
- Very Low APR: PenFed Gold Visa® Card
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Updated: February 4, 2019
Credit unions are local, customer-centric and they have the financial products of a bank. What's not to love?
Add to that, they offer credit cards with lower APRs and no annual fees – and sometimes no fees at all.
There are a few disadvantages, though, that might influence your decisions about whether to take out a credit union credit card. Here, we look at:
Credit unions, which are not-for-profit and owned by their members, offer a low-fee option to traditional banks. The National Credit Union Administration, which is an independent governmental entity, insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
Like banks, credit unions offer loans, savings and checking accounts, and even credit cards. These cards can range from basic, low-interest products to pretty great rewards cards. Two-thirds of credit unions offer credit cards, so you may find a credit union with a card that suits you.
The biggest advantage to a credit union credit card? It likely has significantly lower interest, possibly even offering rock-bottom interest on cash advances. In November 2018, the average interest rate offered by credit unions for credit cards was 11.1%, a steady figure over the last 10 years. That compares to the national average rate of 17.14% on Nov. 7, 2018, according to CreditCards.com.
That said, you have to be a member of a credit union to land its cards, and you have to qualify with the requisite credit score and income. Membership is often generous, in some cases merely requiring membership of an association partnered with the credit union.
One nice thing about applying for a credit card at a credit union – if you don't qualify, chances are the credit union will have lending products to help you build your credit without paying high interest or ridiculous fees. While credit unions and their cards may not have the rewards of a commercial bank's, the savings on fees and interest charges could be well worth looking at credit union cards.
Credit unions are beholden to you, not the shareholders. That means that unlike for-profit financial institutions, such as banks, credit unions answer to you, the member, while for-profit entities answer to the shareholder. For example, a Pew Charitable Trusts study found that credit unions' credit cards advertised lower APRs than for-profit banks. Also, while penalty fees were more common with credit unions, they were typically lower. Here are the advantages and disadvantages of having a credit union credit card:
Although credit unions are often linked to a major employer or university, in many cases, you can join one because of a family member or a group you are a part of.
Each credit union serves what they call the "field of membership." Here is what a credit union might look at:
If you are interested in looking into credit unions, check out ASmarterChoice.org, which can help you find a credit union in your area.
A credit union credit card isn't for everyone, but used correctly it can save you money and help you build credit. Here are 5 types of people who are a good choice for a credit union credit card:
Credit unions have grown up with this country since 1901, serving communities large and small. Today, there are 5,500 credit unions with 117 million members.
We've taken a look at the credit unions in the U.S., using the National Credit Union Administration's database. Studying assets and membership, here are 5 of the top credit unions in the U.S.
Membership to Navy Federal is open to service members, veterans, Department of Defense employess and their families. Cards range from a secured card to business cards to rewards cards, all with low variable APRs – even starting under 10%.
Membership is stricter for this credit union – eligible consumers include North Carolina state employees, family members and surviving spouses who have not remarried, some county employees, members of the North Carolina National Guard and others. State Employees' sole credit card is open to all adult members who live in North Carolina, South Carolina, Georgia, Tennessee and Virginia, and has an APR of 10% variable (including cash advances), although there are no rewards. There's also no balance transfer fee.
This credit union doesn't require you to have served in the military. In fact, you can qualify by being a member of such associations as the American Red Cross or by living in qualified areas. PenFed offers a number of credit cards, all with no annual fee. Many are rewards cards, although you can get a lower interest rate by going with a basic card such as the PenFed Gold Visa Card.
In addition to the obvious – you are affiliated with Boeing – if you live or work in Washington state or parts of Idaho or Oregon, or you are a member of certain associations, you qualify for membership at BECU. This credit union offers 2 credit cards, both with low variable APRs. One offers rewards and the other will lower your rates as your credit improves.
As you would think, the members of SchoolsFirst are associated with qualifying schools, colleges and universities in California, primarily for employees and family members. This credit union's credit cards include a secured card with a fixed rate APR of 13.90%. One offers payment plans for 10- and 11-month paycheck cycles.
Laura is an editor and writer at CreditCards.com. She has written extensively on all things credit cards and works to bring you the most up-to-date analysis and advice. Laura's work has been cited in such publications as the New York Times and Associated Press. You can reach her by e-mail at laura.mohammad@creditcards.com and on Twitter @creditcards_lm.
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