What Are the Pros & Cons of Getting a Credit Card from a Credit Union?

Posted on: 13 May 2019

Credit unions are unique financial services, but they are often associated or confused with regular banking institutions because the services they provide can be so similar. However, credit unions tend to be more flexible and consumer backed. If you are offered a credit card from a credit union, you may be wondering what the difference is. Take a look at some of the pros and cons of getting a credit card from a credit union. 

Pro: You will likely have lower annual fees. 

One of the biggest reasons consumers like credit union credit cards is the simple fact that they tend to have lower annual fees than regular credit cards. In fact, you may not have an annual fee at all with some service providers. Typical credit card companies can have some pretty astounding fees that have to be paid annually as a cardholder, especially if you are not a long-time customer or do not have the best credit rating. 

Con: There may be fewer rewards available for cardholders. 

Credit unions tend to offer cards that have fewer frills, and they do this to keep costs low and operation terms simple. While it is appreciable to have such a straightforward card to use, it can also mean you may sacrifice a few of those fancy perks that can come along with other card types from regular banks and institutions. For example, you may not get things like reward points for travel with your purchases. 

Pro: You're likely going to find a credit union to be more flexible with payments. 

One of the things that credit unions are known for is offering superior customer service, and they will do so even when times get tough and cardholders are having financial difficulties. Many credit union credit cards have associated programs for cardholders who are facing problems making payments. You may be able to take advantage of something like payment deferment or a modified payment plan for a temporary span of time. 

Con: Credit union accounts can be linked even with different products. 

If you are getting more than one type of loan product from a credit union, those accounts may still be linked together in some way. For instance, if you go through a credit union service to get an auto loan and later get a credit card from the same place, your accounts may be tied together in some form or fashion.