Credit Unions Credit Cards

Choosing A Credit Union Credit Card

Big banks are run by a board to the benefit of external shareholders. Credit unions are run by its members for the benefit of its members.

If you're a customer, you're a member.

Credit unions tend to focus on providing value, keeping costs low to help members save money on the financial products and services they need. So, credit cards from unions can tend to be fairly basic.

Cost

Credit unions pride themselves on passing on savings to their customers, which results in lower annual fees and lower interest rates.

These types of cards suit people looking to keep costs down, who don’t use their card too often, or want an emergency fund.

They can also be helpful if you tend to carry a balance month to month since they often have low interest rates.

Features

You can still find good features on credit union cards. You should expect to be able to make contactless payments, while enjoying security in the form of fraud prevention and zero liability. Compatibility with Samsung Pay, Apple Pay and Google Pay can be a bonus as well.

What about rewards? Some credit union credit cards offer rewards, occasionally through the credit union’s own rewards program, or more often as part of a larger program offered by an external provider. Meanwhile, higher end options may also offer extras such as complimentary travel insurance, purchase protection and concierge services.

Benefits

• Security: Credit unions in Australia must abide by all the same rules and regulations as banks. Credit union credit cards also offer all the security features you’d expect on a credit card, including chip & PIN, fraud monitoring and zero liability on fraudulent payments.
• Community: Credit unions are often involved in the communities they serve. By being part of a credit union, members can give back to their community for the benefit of all.
• Philosophy: Credit unions are run differently from banks, with many going so far as to have their own philosophy regarding the way financial institutions should be run. A credit union can be a refreshing change if you're fed up with how big banks are run.
• Membership: Many credit unions were originally created to serve members within a geographical area or a certain industry. While some continue to limit their membership to those who fit that criteria, most are open to all.
• Being Part of Something: When you apply for a credit union credit card, you are essentially becoming part of something. To a big bank you are a customer; to a credit union you are a member. This often comes with voting rights, which allows you to have a say in how your credit union is run.

Do you have to join the credit union to get a credit card?

As a cardholder you'll have to join the credit union to become a member. You may have to pay a small joining fee and fill in a membership form online or in person.

Some credit unions limit their membership to certain industries. So, for example, it might be the police force, a mining industry or a retail chain. Current and retired employees would be eligible.

In other circumstances, a credit union may have the name of a certain industry or geographic location, but membership is open to all.

Why choose a credit union credit card?

There are plenty of reasons why you might want to choose a credit union credit card.

• You want to save money: Credit unions focus on value, reinvesting their profits back to offer savings to their customers. This typically results in lower annual fees and interest rates on their credit cards, which can help cardholders save in the long term.
• You want a simple card: While there are credit union credit cards with features and rewards on offer, many keep it simple instead. This can work well for cardholders who don’t need complex extras, who simply want to use their card to access credit, or who want to keep a card for emergencies.
• You want a say in how things are run: As a cardholder, you are a member owner of your credit union. That usually means you can attend AGMs, to then get a vote in how the credit union is run.
• You want to give back: Credit unions often have a strong focus on community. Being part of a credit union means you are aligned with an organisation that gives back to the community, providing help where it’s needed most.
• You don’t like big banks: While big banks certainly have their fans, they’re not for everyone. A credit union can provide a worthy alternative to those who don’t want to be part of a big bank corporation.

How do you compare credit union credit cards?

Just like any other type of credit card, there are certain factors to consider when comparing the options on offer from a credit union.

• Annual Fee: Want to keep costs down? Opting for a card with a low annual fee could make that happen. And luckily for you, there are heaps of credit union credit cards with low annual fees to choose from. Want to save even more? Keep an eye out for no annual fee options.
• Interest: If you tend to carry a balance, choosing a card with a low interest rate could save you some serious money. Credit unions and other customer-owned providers often have the lowest purchase rates in the market, so if low interest is what you want, a credit union is most definitely the place to be.
• Features: For the most part, if you choose a low cost card with a low annual fee and interest rate, there won’t be many extravagant features on offer. As with the big banks, low annual fees typically mean fewer features, while higher annual fees mean more features. While there are credit union credit cards with some nice perks, it’s a good idea to weigh the perks against the cost before you apply.
• Rewards: Credit unions typically offer a smaller range of credit cards than bigger banks. But for those credit unions with a few cards on their books, a rewards option may be available. Find out more about the rewards program if you’re unfamiliar with it, while also taking into account the card’s earn rate, your potential points earn, and any points caps in place.

Do credit union credit cards have introductory offers?

By checking out the range on offer, you may just find the intro offer for you. While you are unlikely to find big ticket bonus rewards offers often found within a big bank range, you may find some enticing offers on purchases, balance transfers and annual fees.

• Balance Transfer Offers: With this type of offer, you could pay a lower rate of interest over an introductory period when you transfer a balance from another card. If you think you may not be able to pay off your transferred balance within the intro period, a credit union credit card with a low revert rate could be easier to deal with in the long term than a big bank card that reverts to a cash advance rate in the 20% p.a. range.
• Purchase Offers: With this type of offer, you will pay a lower rate of interest on purchases over the card’s introductory period. This could provide an easy way to save on interest if you have a larger purchase planned – as long as you manage to pay it all off within the intro period.
• Annual Fees: With this type of offer, you pay a reduced annual fee either for the first year, or for the life of the card. Allowing you to save money, it could also let you try the card on for size while enjoying more value on everything it offers.