Q: Is it possible to get a secured card from a credit union?
A: Credit unions can be a great place to turn to for credit. In fact, my auto loan is through a credit union. However when it comes secured credit cards, there are some important things you need to take into account:
Some credit union credit cards are actually managed by banks
You would think credit unions that offer secured cards would also manage them? Well, that’s not always the case. Years ago (before the financial crash) there was a huge trend in credit unions selling off their credit card portfolio to big banks. So if you get a card from one of the many credit unions that did this, you are essentially just getting a bank-issued credit card.
Not every credit union has sold off their card business. According to an article I read on Suze Orman’s website, of the 7,900 credit unions in this country, approximately half of them (3950) offer credit cards. Out of those about 10% are managed by banks (thanks for the stats Ondine Irving).
How do you know if a credit union’s card is manage by a bank? Dig through the fine print on the application and if, for example, you see FIA Card Services, that is actually Bank of America. Infibank and Elan are a couple other common big name banks to keep an eye out for.
You will need to join the credit union to get their cards
One of the drawbacks about credit unions that offer secured credit cards is that you will have to become a member, before you can get their card. If you want to do that anyway, then it works perfect. However if you don’t, then it may be a waste of time and money. The time it takes to open and manage your membership and the money for any fees you might incur (i.e. Penfed Federal credit union requires a $20 mandatory donation to join if you aren’t affiliated with the military).
You may have to attend educational courses
Reportedly, some that offer secured credit cards (or cards for those with bad credit) will run courses or seminars and ask you to attend. I doubt this is a common practice, but you still hear about it nonetheless. The frustrating thing about this is that most people who have ruined their credit have already learned from their mistakes and know what they did wrong, so they feel this type of requirement is pointless.
Although Credit Card Forum does not normally advertise credit union credit cards, we do think they are a great option for many. They aren’t very good for rewards, but if you have good credit you can usually get a card with a decent APR, making them a smart choice for those that carry a balance.
As far as secured credit cards are concerned, if you choose to go the route of a credit union to get one, just make sure you do your research and know what you’re getting yourself into. Here are a few of the better ones for secured:
- Navy Federal CU – offers the “nRewards” secured for no fee but the minimum security deposit is $500
- Union Plus CU – offers a $20 secured card but it’s actually issued by HSBC
If you would like to check out some great secured credit cards from banks, click below to check out our sponsored rankings which are constantly being updated with the best cards: