If I want a Credit Card offered through a different Credit Union should I slowly transition my banking to that CU?
No. There's no inherent reason to link the place that you bank with any other financial service. There may occasionally be benefits; for instance you can sometime get lower rates on mortgages or loans by having a a checking account with an institution. Or perhaps it'll be easier for you to make a same-day payment on a credit account. There could be some negatives as well. If you fall behind on a loan account, the bank may take money from your savings/checking account to satisfy your debt. Choose a bank or CU that's convenient to you. Choose a credit card from whatever bank or CU provides you with the best benefits. If that credit card is coming from a CU that requires a savings account for membership, open a minimum balance savings account and apply for the product you're interested in. If your credit is as good as you claim, they'll be happy to offer you the credit card regardless of whether you do your day-to-day banking with them. I don't have an account with either of those CUs, but I do have membership at 2 different CUs.  If they accept credit card payments online via transfer from another institution, there's no reason to move your money, unless there are other benefits (higher interest rates). All the CUs would likely require is membership ($5 deposit minimum?).  If you were to get a card through Chase or Capital One, you wouldn't be expected to open a checking/savings account with them and transition over to those accounts. As has been stated, you don't need to actively bank with a credit union to apply for one of their credit cards. That said, one benefit to having account activity, and significant capital with a CU, is to increase the likelihood of having a larger credit line granted to you, when you do apply. If you are going to use the card sparingly however, then this is a non issue. That said, if you really want to maximize card benefits, then you want to look for cards with large sign up bonuses (e.g. Chase Sapphire, or Ink Bold if you have a business) and sign up exclusively for those bonuses. These cards offer rewards in excessive value of $1000 in travel services (hotels/plane tickets), or $500 cash back if you prefer straight cash back redemptions. If you prefer to keep it really simple, you can sign up for a cash back card, like the Amex Fidelity, which offers 2% cash back everywhere, with no annual fee (albeit the cash back is through their investment account, which you don't actually have to 'invest' with). Personally, I have the Penfed card, and use it exclusively for gas (5% cash back). I also have a Charles Schwab bank account, which I keep funded exclusively for ATM withdrawals (free ATM usage, worldwide, 100% fee reimbursement). I use the accounts exclusively for the benefit they provide me, and no more and have never had an issue. I also have 3 dozen other credit cards which I signed up for exclusively for the sign up bonus, but that's outside the scope of this question. I only mention it because you seem to believe it is difficult to get approved for a new credit line. If your credit is good however, you won't have a problem.  For a small idea, of how to maximize credit card bonus categories, I would advise you read this. As mentioned in the article, its possible to get rewards almost everywhere you shop. In short, anytime you use cash, you are missing out on a multitude of benefits a credit card offers you (e.g. see the benefits of a visa signature card) in addition to points/cash back.
I think you should try to talk with the credit union at your campus first, they may have offer you a credit card even you don't have any credit history. "The real answer is to talk to the bank. In the case of the last car loan I got, the answer is ""no"". When I asked them about rates, they gave me a printed sheet that listed the loan rates they offered based on how old the car was, period. I forget the exact numbers but it was like: New car: 4%, 1 year old: 4.5%, 2-3 years old 5%, etc.  I suspect that at most banks these days, it's not up to the loan officer to come up with what he considers reasonable terms for a loan based on whatever factors you may bring up and he agrees are relevant. The bank is going to have a set policy, under these conditions, this is the rate, and that's what you get. So if the bank includes the size of the down payment in their calculations, then yes, it will be relevant. If they don't, than it won't. The thing to do would be to ask your bank. If you're only borrowing $2000, and you've managed to save up $11,000, I'd guess you can pay off the $2,000 pretty quickly. So as Keshlam says, the interest rate probably isn't all that important. If you can pay it off in a year, then the difference between 5% and 1% is only $80. If you're buying a $13,000 car, I can't imagine you're going to agonize over $80. BTW I've bought two cars in the last few years with about half the cost in cash and putting the rest on my credit card. (One for me and one for my daughter.) Then I paid off the credit card in a couple of months. Sure, the interest rate on a credit card is much higher than a car loan, but as it was only for a few months, it made very little real difference, and it took zero effort to arrange the loan and gave me total flexibility in the repayment schedule. Credit card companies often offer convenience checks where you pay like 3% or so transaction fee and then 0% interest for a year or more, so it would just cost the 3% up front fee." "I don't think credit cards support depositing money into to begin with. Anyone could deposit money to a Credit Card acccount.  All they need is your bank's name, Visa/Mastercard, and 16 digit number.  It is done through the ""Pay Bills / Make Payments"" function in online banking.  So tell me, what does it mean that PayPal will transfer the money to my VISA card You can use the new balance for spending via Credit Card, the effect is same as making a payment from your chequing account to credit card account.  Will it simply just get transferred to my bank account by the local bank after that Some banks would refund the excess amount from your Credit Card to your Chequing Account after a while, but most don't. People keep credit balance on credit card to make a purchaes larger than credit limit. For example, if your credit limit is $1000, balance is $0, and you made $500 payment to the credit card, you can make a purchase of $1500 without asking for credit limit increase." My wife and I chose to share all bank accounts and credit cards. We did so because we realized that, over the course of a marriage, the pendulum of who is the primary breadwinner may shift repeatedly. Having one account gets us in the habit of thinking about our needs and wants together and eases any transitions that may come as one or the other of us quits a job/returns to school/reduces hours. I should also say that this system would likely not work well if either partner has semi-compulsive spending/consumption habits. I'd recommend separate bank accounts with a joint account for your mortgage in that situation. The U.S. bankruptcy laws no longer make it simple to discharge credit card debt, so you can't simply run up a massive tab on credit cards and then just walk away from them anymore.  That used to be the case, but that particular loophole no longer exists the way it once did. Further, you could face fraud charges if it can be proven you acted deliberately with the intent to commit fraud.   Finally, you won't be able to rack up a ton of new cards as quickly as you might think, so your ability to amass enough to make your plan worth the risk is not as great as you seem to believe. As a closing note, don't do it.  All you do is make it more expensive for the rest of us to carry credit cards.  After all, the banks aren't going to eat the losses.  They'll just pass them along in the form of higher fees and rates to the rest of us. They are not as good of an option when compared to a card you open chosen based on features and rates.  Get a card with a lower rate that can be used anywhere. "The short answer is: it depends. The longer answer is that balance transfers are tricky, and often a bait-and-switch; they'll offer 0% interest, but charge a 3-4% ""fee"" (which isn't interest and is perfectly legal) on the amount transferred. If you transfer $5000, you now owe the new card company $5,200. Now, that could be fine with you; at an 18-20% APR on your old card you may have been charged that much in just one or two months, and by capitalizing this fee up front you lock in 0% for a year. However, there are other possible machinations behind the scenes. For instance, you may incur retroactive interest on the full balance if not paid off in the year (at 20% APR on $5000, that's an extra grand you will owe if there's even one dollar of the original transferred balance left in the account). Paying off the balance and thus avoiding these penalties has actually been made harder by the CARD Act, which required creditors to apply any payment made to the highest-interest portion of the balance first. As balance transfers are 0% they are the last on the list, so if you transfer a balance and then carry an additional balance you are setting yourself up for failure. You MUST have a zero-dollar balance for one month sometime during the year in order to be sure the balance transfer is paid off and no penalties will be incurred. That can be hard, because 5 grand is a lot to pay off. To pay off a $5000 balance in 12 months requires payments of $417. Miss one and you'll have to make it up over the remaining months. If you transferred a balance, you probably didn't have $420/mo to pay to the card in the first place. In summary, balance transfers can work, but you have to understand all of the terms and conditions, and what will happen should you violate any of them. If you don't understand what you're getting into, you could very well end up worse than you started." Some years ago a call center operator told me a bit more than they probably should have.  They like to see a lot of money go through the card, but very little staying on the card. Yes, they make money on the interest but one card defaulting blows away the profit on a lot of other cards. The 3% take from the merchants is both reliable and up-front, not 6 months down the line when (and if) you pay the interest. So if you want to make your credit card company happy, pay your bills in full every month. I have credit far beyond my actual means because I run work expenses on my personal card, I was told they didn't care (and had already guessed) that it wasn't my money. The point was I was handling things in a way they liked. Not quite at Palladium status, but cards with $200 annual fees are mine for the asking, and I haven't paid interest since the early 1990's.