Interested in getting a credit union credit card? Find out how these financial institutions differ from banks and compare your options here.
Credit unions provide a range of financial products and services that are similar to conventional banks. While banks are led by shareholders and have a focus on generating profits, credit unions are often run by members and focus on providing benefits to all of their members. This focus means the profits made by credit unions are usually passed on in the form of more competitive products and services.
You can use this guide for everything you need to know to compare credit union credit cards, including how they’re different to banks and what you need to know to choose a credit card that’s right for you.
Compare Credit Union Credit Cards
The finder.com.au list of credit union credit cards
Compare the features of the credit cards from credit unions below.
| Credit Card | Feature |
|---|---|
| Get a low price annual fee and up to 62 days interest free. | |
| A low cash advance card with a $0 annual fee. | |
| A $0 p.a. annual fee credit card. |
How do credit union credit cards compare to other options?
Credit union credit cards often focus on providing potential savings and ongoing value for members. As a result, the credit cards available tend to have lower ongoing interest rates and annual fees than those provided by larger financial institutions. They may also come with extras such as rewards programs or complimentary travel insurance and other perks.
To get a credit union credit card, you need to become a member of the credit union, which usually involves a fee of around $5 to $10. You may also need to open an everyday transaction account before or during your application for a credit union credit card.
Once you’re a member, you also have the opportunity to influence how the credit union is run. For example, you may be able to vote at annual general meetings or provide feedback that influences the features of different products.
In comparison, banks and larger financial institutions operate more like conventional businesses. This means they often provide more competitive introductory offers than credit unions. For example, balance transfer credit cards from banks typically provide lower introductory interest rates and longer promotional periods in comparison to credit union credit cards.
Banks also tend to provide more comprehensive rewards programs and complimentary extras than credit unions. When it comes to applying for a bank credit card, you don’t need to become a member or open a transaction account. However, this means you don’t have a say in how the bank is run or how different products work.
What about building societies and mutual banks?
Like credit unions, a building society or mutual bank is a member-owned financial institution with a focus on providing value to members. The credit cards and other products provided by building societies are very similar to those offered by credit unions. As a result of these similarities, credit unions and building societies are often put in the same category.
What’s right for me? Credit unions or banks?
| Credit union | Banks | |
|---|---|---|
| Focus | Credit unions focus on providing better member experiences and on improving their financial situation by providing quality products and suitable advice. | Banks focus on maximising profits for their shareholders, so they can attract more investors. |
| Profit | Any profit that a credit union generates goes back into the system to provide its members competitive rates and offerings. | Profit that banks generate goes to its shareholders, and the bank might invest some of it in different kinds of financial products. This works in your favour only if you’re a major stakeholder of the bank you’re banking with, not otherwise. |
| Security | Credit unions offer Mastercard and Visa credit cards, both of which provide secure payment systems. They are subject to the EFT code, so you get protection against fraudulent electronic transactions. | Banks offer the same security measures. |
| Rewards | Credit unions provide credit cards linked to some of the major rewards programs. | Banks offer a range of rewards credit cards as well. |
| Other benefits | Banks offer a range of rewards credit cards as well. | Banks also offer added features through their credit cards, but you might have to pay higher annual fees in this case. |
How to compare credit union credit cards
If you’re interested in getting a credit union credit card, include the following factors in your comparison to find the right option for you:
- Standard interest rates. Credit union credit cards tend to have lower standard purchase rates than bank options. Some credit union cards also apply the same interest rate to both purchases and cash advances (rather than having a separate and higher cash advance rate).
- Promotional interest rates. As credit union credit cards typically offer low ongoing interest rates, the promotional rate offers may be more conservative. If you want to get a credit card with a low introductory interest rate for balance transfers or 0% on purchases, make sure you compare both credit union and bank options to find one that offers both introductory and ongoing features that will work for you.
- Balance transfers. Some credit union credit cards don’t offer balance transfers. The cards that do provide this service are less likely to have a 0% interest rate during the introductory period when compared to cards from banks. However, credit union credit cards usually have a lower ongoing interest rate than credit card revert rates. So if you're unable to repay your balance by the end of the promotional period, make sure you consider whether you're better off going with a 0% promotion with a higher revert rate or a low ongoing rate.
- Annual fees. Most credit union credit cards have low annual fees (i.e. under $100).There are also some credit union credit cards that don’t charge an annual fee. Some credit cards also have low or $0 annual fees, so you need to weigh up whether the features of the card justify these costs.
- Interest free days. If you pay your balance in full by the statement due date each month, you could get up to a certain number of interest free days for each statement period. This feature is available with both credit union and bank credit cards.
- Rewards. Credit unions offer fewer rewards credit cards than banks. There are still a few options that offer points for purchases made on the account, though, including some cards that are linked to frequent flyer programs. For example, the Visa Platinum credit card from Qudos Bank (formerly Qantas Credit Union) offers 1 Qantas Point per $1 spent on most purchases, and 0.5 points per $1 for Qantas purchases.
- Other fees. Like banks, credit unions may apply other fees for a range of credit card transactions and services. The most common include international transaction charges, late payment fees and cash advance fees. Always check the product details for information on what fees may apply so you can factor them into your comparison.
- Membership requirements. You need to sign up as a member before you can apply for a credit union credit card. In some cases, you can request membership when you apply for a credit card but you may have to apply separately and wait for your membership to be approved before you can get a card.
- Complimentary extras. In general, only gold or platinum credit union credit cards will offer complimentary extras such as travel insurance or concierge services.
- Branch access. Credit unions may have a more limited branch network when compared to larger financial institutions. Before you apply for a credit card from a credit union, you should check out the existing branch network and other access options to decide if it will work for you.
Benefits and disadvantages of credit union credit cards
Benefits
- Competitive ongoing interest rates
- Lower annual fees
- Same interest rate for purchases and cash advances
- Personalised service
Disadvantages
- You have to meet membership eligibility requirements
- Limited reward options
- Limited balance transfer options
- Less competitive introductory offers
Other factors to consider
As well as being focused on benefitting members, credit unions usually have a community focus. For example, they may provide funding for local community groups and schools, encourage arts and performance, and work on building stronger human bonds.
Some credit unions also limit membership to people in specific industries. For example, Teachers Mutual Bank primarily offers membership to retired and current teachers, university students studying to become teachers and other employees in the education sector.
As a result of these credit union features, people often pay as much attention to a credit union’s philosophy as they do to specific products and features. This level of involvement means that credit unions often suit people who want to completely change the way they bank.
Credit unions also try to make sure they only lend to people who can make repayments, and they have support services in place to help members going through rough patches. When it comes to credit cards specifically, credit union options tend to offer the most value to people who want an ongoing, affordable option.
If you’re looking for a card that offers short-term value, on the other hand, you may find that bigger financial institutions provide you with more options. But either way, it can be worth comparing credit cards from both credit unions and banks to see which option is most suited to your needs. Credit unions offer a wide range of credit cards for members, including low rate, low fee and reward options. Now that you know more about the different structure and focus of credit unions, you can compare these cards to those of larger financial institutions to find one that suits all of your needs.
I would like to know if I could get a credit card. 0400292573
Hi Mary, thanks for your inquiry!
Our credit card reviews will give you the necessary information to deciding which card is best for your needs. The application requirements are listed at the bottom of each review. If you meet those application requirements then you will be eligible to apply. Please refer to this page to compare credit cards and offers.
Cheers,
Jonathan
what credit card would be the best to apply for with not a very good credit rate and on centrelink
Hi Michelle, thanks for your inquiry!
Banking institutions that issue credit cards have varying lending criteria and generally require a reasonable credit rating that will be able to repay the card back. Different banks have certain income, employment and credit status requirements. You may like to refer to the following link for loans for people on centre link benefits.
Cheers,
Jonathan
I am on a disability pension and have been turned down for a balance transfer by major banks. At the moment I have a GO Mastercard paying an interest rate of 28% with a $3000 limit. All my financial advisers tell me to get a low interest credit card. How do I do that when on a pension? I am also told that every time I get rejected it goes against me as a bad credit risk.
Hi Alison,
Thanks for your question.
It is correct that every time you apply for a credit card it is listed on your credit file. Too many rejected card applications can have a negative impact on your credit score and can be a bad sign to lenders as you keep getting rejected by other credit issuers. Having said that, if you wait a while following a rejected card application (some card companies set a minimum of three months) then you may be able to apply for a new card.
If you’d like to look at low interest credit cards, you can compare them on this page. The eligibility requirements for each card are listed on the bottom of each review page. If you’re unsure whether you are eligible, it may be worth getting in touch with the card issuer before you apply to discuss your application.
I hope this has helped.
Thanks,
Elizabeth
Thanks. I thought that was the case. The last bank I applied to was NAB and they told me the complete opposite and refused to tell me what the credit criteria was.
Are there any credit cards I can apply for if I have a bed credit rating?
Hi, Vee.
Credit cards are a product for people with a good credit rating only. A lender may consider an applicant who has taken steps to amend a default listing on their credit file. Speak to the lender directly for further information about this.
Thanks for your question.
Why is it once you retire you cannot apply for a credit card, as soon as you say you receive the pension it is a no, regardless that you may be drawing a annuity or super pension as well. I am referring to CUA but I believe the 40,000 limit applies to all. Our total income is above the 40,000.
Hi Mary.
Thanks for your question.
I can’t comment on the lender criteria of various lenders, however, if you’re earning above the minimum income requirement your application should be considered – regardless of whether you’re retired or not. Some applications even allow you to select retired when you choose your employment status.
You may want to consider a low rate credit card. These cards have a lower income requirement than other cards in the market.
Please let us know if you have any further questions.
Is there a credit union in Australia with branches in all states & territories?
Hi Lyn.
You can find this information on the lender’s website. Each union’s website have a feature that allows you to search for branches and ATMs around the country.
Thanks for your question.
I have a closed travel card it as a credit of $40.00. I want to transfer the money to my bank account. How do I do it?
Hi Francesca.
Which card is it? Please let us know a little more so we can offer specific information.
Generally speaking you should be able to contact the card issuer and request that they transfer the funds to a nominated account.
I hope this helps.
Does a credit union have the same status as a bank?
Hi Bev. Thanks for your question.
Can you please clarify what you mean by status.
Credit unions are different to banks mainly because credit unions are owned by their members.
Credit unions are accountable to the same laws as banks. And when it comes to their credit cards, they’re offered in conjunction with issuers Visa and MasterCard, so their credit union cards offer the same levels of fraud protection as cards offered by banks.
I hope this helps.
Jacob.
I sent my membership fee and haven’t heard anything.
Hey J. Thanks for your question. Please contact the lender directly for more information. You can find contact numbers on this page. Jacob.