Credit unions are not all well known as the big banks, but they offer an alternative to the major issuers' credit cards. In general they are more consumer-friendly and may offer lower rates, too.
Credit unions are non-profit organizations which are owned by their members. Unlike banks, they don't have to make a profit to satisfy their stockholders - it's the members who call the tune.
That's why many of them charge lower interest rates on credit union credit cards than the banks are able to offer.
Many credit unions offer applicants a 'second chance' - if a credit card application is turned down, a member can ask the loan committee to review the application. The review will include assessing the member's motivation as well as credit history, giving credit-impaired individuals who are trying to repair their credit a better chance.
Penalty charges are often less than with bank credit cards - half of all credit union credit cards don't charge penalties at all - and credit unions are also more willing to assist members who find themselves in financial difficulties.
Many credit unions don't charge a balance transfer fee, so that moving to a credit union credit card from a bank card has no up front cost for the customer.
There are a few downsides to credit union credit cards, though. One is 'cross collateralization' - that means if you have other assets (such as a deposit account) with the credit union, it can take those to pay the credit card.
Another factor you should consider is that some credit unions are small and underfunded, and have been finding it difficult to survive. Some have been taken over by the National Credit Union Administration. (Depositors should note that they are covered for USD 250,000 in any one credit union, just as they would be if they left their money in a bank.)
And you will need to become a member of the credit union before you can apply for the card. Some credit unions restrict membership to particular groups - for instance, Navy personnel, or people living in a particular community.
Not all credit unions offer credit cards - only about half of them do - so there is a bit of homework to do before you decide to join up.