Q: Do credit unions offer credit cards? Will they have better rates or features? How can I compare them with big bank cards?
As member-driven institutions, credit unions operate on behalf of their account holders instead of solely for the benefit of shareholders. When you deposit cash in a credit union, caretakers reinvest your savings into the community, usually as mortgage or auto loans. However, credit cards require lots of overhead to operate. Therefore, many credit unions outsource their credit card operations to banks under "private label" marketing agreements.
You can tell your credit union's involved in one of these deals if your credit card application includes acronyms like FIACS, GEMB, or WFNNB. Bank of America owns FIA Card Services, and many of its credit union credit cards include rates and rewards similar to BofA's WorldPoints cards. GE Money Bank and Comenity's World Financial Network National Bank also issue traditional Visa and MasterCard accounts on behalf of partner credit unions.
Meanwhile, some of the country's largest credit unions now issue their own accounts in-house, with rewards credit cards that often exceed the value of their big bank rivals. Some of my favorites include:
- Pentagon Federal Credit Union. Designed primarily for military families, the PenFed Premium Travel Rewards American Express Card offers excellent travel perks with no annual fee and no foreign transaction fee.
- Navy Federal Credit Union. The nRewards series includes a secured rewards credit card with no annual fee.
- Andrews Federal Credit Union. The GlobeTrek Visa Rewards Card includes an embedded EMV chip, enabling you to patronize "chip-and-PIN" merchants in Europe with no added fees.
Credit union eligibility rules may require you to work or live within a geographic area, to work for a participating employer, or to join an affiliated non-profit organization. If you qualify, you can enjoy some of the country's best rewards credit cards.