Credit Union Credit Cards: The Bad, the Good, and the Excellent

There are numerous options when it comes to credit cards, including Credit Unions. While Credit Union credit cards aren't an option for everyone, there are some great upsides that you might not be aware of. Here are a few of the perks:

Excellent customer service. Why is customer service at credit unions generally superior to banks? Because Credit Unions are member-owned and providing service to members is the ultimate goal. Dealing with an organization who's dedicated to making you happy can be quite refreshing.

Competitive rates. Unlike banks, Credit Unions are nonprofits so they're not looking to maximize returns on credit card interest. And remember that the main goal is to serve the members. That said, they don't want to lose money either, but the end result is that you often get a better rate than you would at a bank.

Consumer-friendly terms. In keeping with the idea that you're a member and not just an account number, Credit Unions tend to have really good terms. According to a study by Pew Charitable Trusts, Credit Unions have much lower advertised rates than banks. Not only that, the penalty fees were "half the cost of comparable banks' fees and there were fewer dangers associated with 'unfair and deceptive' practices."

Downsides to Credit Union Credit Cards

While the positives of Credit Unions sounds great, you should keep in mind there are some less-than-desirable aspects to Credit Union credit cards as well. Consider the following:

Stricter underwriting. Credit Unions typically have pretty high standards for approval and so you may need a very good credit score to secure a new account. However, if you don't have stellar credit, you can look for a Credit Union that offers a secured credit card. There's nothing wrong with starting out with a secured card to improve your credit score.

Less generous credit limits. While true, this isn't a problem that's unique to Credit Union cards at this time. Many of the major card issuers have cut back on limits due to the CARD Act legislation and to the credit crunch.

Less robust rewards programs. As a rule, Credit Union cards aren't known for liberal rewards features. Most people wouldn't even think to check out a Credit Union card when looking for a rewards card.

Credit Union Credit Cards: The PenFed Exception

But as with many things in life, there are exceptions to the rule. Pentagon Federal Credit Union offers excellent rewards.

You must be a member of PenFed Credit Union to apply for any of the mentioned offers. Joining is easy you can establish your membership eligibility through through membership with either National Military Family Association or Voices for America's Troops with a low one time fee. If you are interested in any of the PenFed offers be sure you check PenFed's website for the current terms and conditions.

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