Credit Unions are not like banks, in that they are owned by their members and not by shareholders. This means that profits are not distributed to shareholders but go to improving services for the users of the credit unions.
Credit unions tend to be small, and so tend to offer a basic core of services. This has meant that many of the credit unions, particularly the small workplace based groups, did not tend to offer credit cards, although that has changed over time as credit cards become more popular.
Most credit unions now offer transaction accounts, in which wages and salaries can be paid in and everyday expenses can be paid out. Debit cards have become more necessary for these accounts as they become more common than cheques in paying for goods.
Debit cards look like credit cards and use the same payment mechanism that credit cards use. They are unlike credit cards in that they do not have a separate account in which high interest debt can be built up. They are closest to cheque books in the way in which they work, although they are more convenient, cheaper and can be used abroad.
Debit cards are processed by companies such as MasterCard and VISA. These are international payment card companies who had started up as credit card processors. They are both profit making companies quoted on American stock exchanges, but for most of their lives they were co-operatives owned by the banks and credit unions that issued their cards.
Large branch based credit unions have offered debit cards, along with many other financial products in the same way that the smaller banks offered financial products. However smaller credit unions are offering debit cards more commonly.
Credit unions first developed in Europe in the nineteenth century and were intended as a way of helping farmers with credit and other sectors of the population as a way of increasing the options for saving.
Many of the smaller credit unions today are based in workplaces where the mutual trust that a small credit union needs to operate can be found. There are also small credit unions based on church congregations and trade associations.
