Credit Union vs Bank Credit Card
Credit Unions usually offer lower rates on credit cards than banks do, but they don’t offer such generous rewards. What other pros and cons of banks and Unions in terms of credit card choice.
Member or Customer
Credit unions are member-owned companies that provide services for their members. In order to get a credit card you need to become a member of a Union. Fortunately, it’s not a tough task. If you are trustworthy person, most unions are glad you to join them and take a loan or a card. Moreover they are not likely to cheat you as a member with hidden fees and surcharges.
Rates and Fees
As we mentioned below meridian APR of Credit Unions Cards is up to 20% lower, so their fees. For example average late payment fee is $20 instead of $40. They are non-profit organizations, so they are not trying to make money out of their members. But still it is not charity.
Some unions cannot offer you much rewards, most of them don’t offer them at all. So you have to choose what is more important for you – bonus miles or lower rates.
Credit Unions are often local, which means you can hardly find their ATMs out of state. They can also have less ATMs or have them only inside facilities, because they address to an industry workers. If you travel a lot it can be a big deal.
If you have a home loan and card in a bank, you have two separate accounts, while in credit union your accounts are tied together. This means, that one account is secured by the other. If you have financial difficulties you can choose to make home loan payments instead of credit card bills in order not to lose your property. But with union it will not work, because you have one account for all your loans.
When bank says you “no” that means “no”, but you can try one more time with credit union. If you not agree with decision, you can write a letter to the members and get a second chance or you can apply one more time. You also can apply if you have bad credit score. The board of members can be more flexible and have a human face.
Be aware of replacement
When you apply for a credit card of a union you should be aware that you still can get it from a bank. Almost half of the credit unions don’t issue their own cards, they just transfer your application to the banks – so you get the deal from the bank with higher APR.
Tell us what do you think.
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