Local CUs vs Major Issuers

[Anonymous]

Help me understand which is better. It seems to me that local CUs are more lenient, and offer higher CLs...but that may just be my current rebuilding profile.

On the flip side, I have to assume Major Issuers are "major" for a reason.

Thank you!!

[Anonymous]

Chase's Sapphire Reserve + Freedom Unlimited combo is tough to beat for my wife and I. Chase has massive resources to absorb potentially massive losses to further their long term strategy. Chase also offers a polished app and website.

There are plenty of posts on here about the benefits offered by CUs. It's a trade off.

[Anonymous]

Sorry, hit Post accidentally.

Chase also has the ability to partner with other huge companies. My United Club card offered unique perks. My Hyatt card offers unique perks.

[dragontears]

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@Anonymous wrote:

Help me understand which is better. It seems to me that local CUs are more lenient, and offer higher CLs...but that may just be my current rebuilding profile.

On the flip side, I have to assume Major Issuers are "major" for a reason.

Thank you!!

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Can you define the term "better"? 

What I would consider as "better" could be VERY different than yours and there is no one "best" for everyone. 

[Anonymous]

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@dragontears wrote:

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@Anonymous wrote:

Help me understand which is better. It seems to me that local CUs are more lenient, and offer higher CLs...but that may just be my current rebuilding profile.

On the flip side, I have to assume Major Issuers are "major" for a reason.

Thank you!!

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Can you define the term "better"? 

What I would consider as "better" could be VERY different than yours and there is no one "best" for everyone. 

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Right.   And there are also niches: I think at the moment if you want  a year round uncapped 5% gas card, the only current choice is a "local" CU.    There are also lots of CUs with credit cards that are worse than those from many banks.   So it depends on your needs.

[simplynoir]

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@dragontears wrote:

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@Anonymous wrote:

Help me understand which is better. It seems to me that local CUs are more lenient, and offer higher CLs...but that may just be my current rebuilding profile.

On the flip side, I have to assume Major Issuers are "major" for a reason.

Thank you!!

---

Can you define the term "better"? 

What I would consider as "better" could be VERY different than yours and there is no one "best" for everyone. 

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This pretty much

Depending on what your needs and priorities are will impact what you decide is are best options. Might be you value award earnings and travel partners, perhaps personalized services that are provided with in-branch visits, maybe you don't care about that as long as the ease and functionality of website/apps to manage your accounts is good, and even rates of checking/savings/CDs/etc come into question. All this and more are a checklist a person must make for themselves and can impact what financial institution(s) they decide to do business with

FWIW I think having a safe mix of both is always a good choice. Choose a local CU/bank where you know you can get immediate service for whatever reason and major banks if you want to look for cards with good rewards to maximize your spending. That's how I see it with regards to my own finances at least

[Anonymous]

I think there is a false dichotomy here, if "major issuers" are retail banks. 

I prefer LARGE CU's, which may not be local. Locals can be friendly and welcoming, but may not offer the most generous limits or premium products to complete with retail banks. 

I don't qualify for NFCU but PenFed has been as perfect a bank / lender to me as I could ask for. Generous CL's, and offering Visa Signature products (my local telco CU doesn't) which really closes the gap between purchase protection of CC's vs. debit. 

[Anonymous]

Good points, thank you for the feedback. I suppose I'm not far enough along my rebuild journey to have thought of rewards. In the mid to upper 600s, most Issuers either said no, or offered $300ish credit lines. The local CUs threw me 1-2k without even asking about the derogatories (paid, but there nonetheless).

[Anonymous]

The big difference with CUs and major banks is that CUs are not for profit. They pass the excess profits to their members in the form of lower rates, higher risk tolerance, higher interest rates on deposits, etc. You may not get the best rewards from a CU card but the APRs are usually much better than what you'll get from the large banks (PenFed is a notable exception here, with the average APR seeming to be 16-17%, which is surprising when you have NFCU dishing out 5.99% Platinum cards left and right) and the cards usually come with lower or no fees and things like regular BT offers. 

I use my major banks for rewards but my AOD card could easily become my main card if the 3% sticks around. The only cards I use on a regular basis now are AOD, QS (used it for virtual credit card numbers but now that PayPal has their Key product, I will probably switch those to AOD), Amazon Store Card, and BCP for groceries. 

AOD is unique in their combination of low APR and high rewards though and I don't expect it to be sustainable long term and I have a few CUs in the back of my mind for 2% cards if the AOD gets nerfed too far. 

I wouldn't really shed a tear if most of my bank cards got closed (and in fact I have about 8 cards on my potential list for closure at some point) but AOD and NFCU would really upset me.