I Needed A Credit Card. My Credit Union Couldn’t Help

After seeking a credit card to use during a semester abroad, a college student laments that her credit union couldn’t meet her needs as well as a fintech.

I am a junior at Williams College studying English and leadership, with concentrations in communications and volleyball. Last summer, I was an intern at Callahan & Associates. Part of my duties there involved writing about the financial habits of my generation. That included their needs, how they get information, and how credit unions can attract Gen Z by helping them be more confident about their finances, especially using credit.

My reporting last summer taught me a lot. But then, I became a case study.

The Need For Credit

My search for a credit card began when I arrived home from college for winter break. I am spending the spring semester abroad in Edinburgh, Scotland, and my meal plan and other college expenses won’t be included automatically in my tuition payment.

To support this new far-from-home experience, I needed a credit card to easily conduct transactions in the local economy. Also, I wanted to start building credit before I left the United States to learn what living outside the Williams College prepaid “financial bubble” would require.

Looking For Options

First, I talked to my mom and sister, both of whom have several credit cards. We are all members of the same credit union, and they encouraged me to look there as well as seek other options. What kind of benefits did other providers have for college students?

I started researching online, looking for the best rated credit cards for students, credit cards for people with no credit, and credit cards without foreign fees. The options were overwhelming.

I didn’t want to discount the big banks because of the extensive rewards they offer. I assumed I would travel and dine out a lot while in Europe, and I wanted to see what I could earn in return for those expenditures. However, the application for the first major card I tried was intimidating. I don’t have much of a job history other than summer internships and part-time campus work, and I have no outstanding credit. I also felt uneasy getting a card from a bank or fintech where I had no pre-existing relationship. How would they know I was reliable? Was there a catch in their offer?

So, I asked for a card from the credit union where I had been a member since high school.

One option on my credit union’s website met my criteria: no foreign transaction fees, no annual fee, and a high enough credit limit. I set up an appointment with someone in the lending department where I could present my case — I believed explaining my income, my semester abroad, and the need for the card now would be more effective in person.

The credit union offered a secured card backed by my savings account. I had to show my most recent part-time pay stub from school, which the loan officer used to determine my credit limit.

Needless to say, it was not very high.

During my online searches, I found a card through Deserve, a fintech backed by multiple banks that offers a variety of credit card options, including one designed to help students build credit. The online application asked similar questions to my credit union, which made the process familiar, and a clean user experience on the website made the process easier. Within a week, I learned my application had been approved — with a card limit much higher than my credit union’s offer and not limited by my monthly income.

Seeking First-Time Credit

This experience taught me the benefit of getting a credit card at a young age, but it also brought to light some hurdles to obtaining a card. Seeking credit for the first time can be super intimidating. However, the sooner I start building credit and paying bills monthly, the more comfortable I will be using credit when necessary.

As an existing credit union member, it was easy for me to walk into a branch, talk with an employee, and obtain an approval. That isn’t possible for students who don’t go home frequently, don’t have a credit union nearby, or don’t even know what a credit union is.

Most of my peers are likely to pursue their first card online. To gain their business, traditional financial institutions, including credit unions, should be able to walk through the process with novice student borrowers — whether in person or through online channels — to put them at ease and ensure they’re applying for a product that meets their needs.

A slightly different version of this piece originally appeared in “Just A Member,” a blog from Callahan & Associates cofounder Chip Filson.

January 30, 2023

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