Credit union credit cards often come with lower interest rates and fees compared to major banks, making them a cost-effective option
But with credit union cards you're less likely to get competitive balance transfer offers or earn frequent flyer points.
These cards can be good if you already bank with a credit union, or want to join one and get a low rate, no-frills credit card.
What's the difference between a credit union and a bank?
A credit union is basically a small bank, with one crucial difference being that they're member-owned. This means the credit union operates for the benefit of its members and not shareholders.
Credit unions offer the same kinds of products and services as major banks, including transaction accounts, home loans and credit cards.
Most credit unions operate in specific cities or regions of Australia but these days all of them offer online support wherever you are.
What kind of credit union credit cards are available?
Credit union credit cards often focus on providing potential savings and ongoing value for members. As a result, their credit cards are usually low rate credit cards.
These credit cards have interest rates of around 8% to 16% (other cards can go much higher, to 20% or more). And they have annual fees of around $0-$50.
In comparison, banks and larger financial institutions offer a bigger range of cards and have their own rewards programs.
Membership fee
You have to a member of a credit union to access their products. In practice this just means signing up as a customer. But some credit unions charge a $1 membership fee when you join.
What about building societies, mutual banks and member-owned banks?
Like credit unions, these member-owned financial institutions have a focus on providing value to members and offer the same kinds of products. So credit unions, building societies, mutual banks, member-owned banks and customer-owned banks are often put in the same category.
Since 2010, many established credit unions and building societies in Australia have actually rebranded as member-owned banks or customer-owned banks.
Should I get a credit card from a credit union or a bank?
The pros
Competitive ongoing interest rates
Lower annual fees
Same interest rate for purchases and cash advances
Personalised service
Community focused
The cons
You have to meet membership eligibility requirements
Limited reward options
Limited balance transfer options
Less competitive introductory offers
The bottom line
If you want to bank with a customer-owned institution and are looking for a simple, no-frills credit card, a credit union is not a bad idea.
But if you're looking to earn serious frequent flyer points, get shopping rewards or need a balance transfer, you may find that bigger financial institutions provide you with more options.
How to compare credit union credit cards
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).
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.
Annual fees. Most credit union credit cards have low annual fees (i.e. under $100) and some 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.
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.
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.
Frequently asked questions
This depends on the credit union you wish to deal with, and you can find a number of credit unions that accept online applications for credit cards.
The eligibility criteria for credit cards can vary, but generally includes the following:
You must be at least 18 years of age to apply for a credit card in Australia
You must be a citizen or permanent resident of Australia
You must have a good credit history
You must meet the membership requirements of the credit union
For specific information on application requirements, refer to the product page of any credit union credit card you’re interested in. You may also want to visit a specific credit union’s website for more details.
Most credit unions have small branch networks in comparison to banks. But some may allow you to bank in partner branches, or offer other services. Refer to individual credit union websites for details of their branch networks and access options.
Yes, both credit unions and building societies are accountable under the same regulations and laws as banks in Australia. All credit unions must have an Australian Financial Services Licence (AFSL) to be able to provide financial services and products. The Australian Prudential Regulation Authority (APRA) monitors the functioning of both credit unions and banks.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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Is there a credit union in Australia with branches in all states & territories?
Finder
JacobDecember 2, 2013Finder
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.
FrancescaAugust 15, 2013
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?
Finder
JacobAugust 15, 2013Finder
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.
BevJuly 22, 2013
Does a credit union have the same status as a bank?
Finder
JacobJuly 22, 2013Finder
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.
jJuly 4, 2013
I sent my membership fee and haven’t heard anything.
Finder
JacobJuly 4, 2013Finder
Hi J,
Thanks for your question.
It could take anywhere from a few business days to one or two weeks for you to find out if you are approved. You may need to contact the credit card issuer directly to know the status of your application. You may also refer to our guide to check your credit card application.
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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.
Hi J,
Thanks for your question.
It could take anywhere from a few business days to one or two weeks for you to find out if you are approved. You may need to contact the credit card issuer directly to know the status of your application. You may also refer to our guide to check your credit card application.
I hope this helps.
Cheers,
Jacob